Lecture6 Planning and Strategic Management Effective Strategies Result in High Organizational Performance. Learning Outlines The concept of Planning , the means–end chain, MBO The importance of Strategic Management
Download ReportTranscript Lecture6 Planning and Strategic Management Effective Strategies Result in High Organizational Performance. Learning Outlines The concept of Planning , the means–end chain, MBO The importance of Strategic Management
Slide 1
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 2
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 3
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 4
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 5
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 6
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 7
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 8
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 9
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 10
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 11
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 12
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 13
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 14
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 15
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 16
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 17
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 18
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 19
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 20
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 21
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 22
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 23
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 24
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 25
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 26
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 27
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 28
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 29
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 30
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 31
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 32
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 33
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 34
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 35
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 36
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 37
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 38
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 39
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 40
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 41
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 42
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 43
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 44
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 45
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 46
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 47
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 48
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 49
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 50
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 51
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 52
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 53
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 54
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 55
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 56
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 57
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 58
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 59
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 60
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 2
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 3
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 4
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 5
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 6
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 7
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 8
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 9
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 10
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 11
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 12
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 13
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 14
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 15
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 16
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 17
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 18
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 19
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 20
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 21
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 22
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 23
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 24
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 25
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 26
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 27
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 28
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 29
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 30
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 31
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 32
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 33
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 34
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 35
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 36
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 37
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 38
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 39
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 40
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 41
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 42
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 43
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 44
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 45
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 46
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 47
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 48
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 49
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 50
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 51
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 52
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 53
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 54
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 55
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 56
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 57
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 58
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 59
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。
Slide 60
Lecture6
Planning and
Strategic
Management
Effective Strategies Result in High
Organizational Performance.
Learning Outlines
The concept of Planning , the means–end
chain, MBO
The importance of Strategic Management
The main steps in the strategic
management process
The types of organizational strategies
Learning Outcomes1
What is planning: definition of planning,
purposes of planning, performance
The concept of the means–end chain.
• Describe the management by objective
(MBO) approach.
Learning Outcomes2
The importance of Strategic Management
The main steps in the strategic management
process
The types of organizational strategies
strategic management: definition of strategic
management and strategies, business model
Why is the strategic management important
Learning Outcomes3
Types of organizational strategies
Types of corporate strategy: corporate
strategy, competitive strategy, functional
strategy
What is planning?
– A primary functional managerial activity that
involves:
• Defining the organization’s goals—what we
will be in the future?
• Establishing an overall strategy for achieving
those goals---An abbreviated map
• Developing a comprehensive set of plans to
integrate and coordinate organizational work.
--A detailed map
Why do managers plan?
Purposes of Planning
Planning is the primary management
function that establishes the basis for
all other management functions
– Provides direction
– Reduces uncertainty
– Minimizes waste and redundancy(多余）
– Sets the standards for controlling
计划的作用
A means-ends (手段－目的）chain
Definition: An integrated network of goals
in which the accomplishment of goals at
one level serves as the means for
achieving the goals, or ends, at the next
level。
低层目标的实现是上层目标实现的手段。
Identification of means and ends, do not
lose the expected ends.
MBO
–MBO consists of four elements
» goal specificity：clear goal
» participative decision making: operators participate
the decision making process
» explicit （clear) time period: a schedule to attain the
goals is essential
» performance feedback: rewards or punishment
should based on performance
– MBO makes objectives operational through the
process by which they cascade( flow downwards)
down through the organization
Defects of MBO
Stability is needed to work toward
accomplishing the set goals.
Overemphasis on accomplishing the goals
makes individuals ignore others’ work and
can be counterproductive.
It can be treated as an annual exercise in
filling out (fill in ,填写）paperwork, which is
hard to motivate employees.
What is strategic management?1
Strategic management is what managers
do to develop the organization’s strategies
Strategies are the decisions and actions
that determine the long-run performance
of an organization.
Role of Strategic Management
Establishing the game plan or roadmap :
1. How the organization will do whatever it’s in
business
2. how it will compete successfully
3. How it will attract and satisfy its customers in
order to achieve its goals.
Question
How is strategic management related to
the planning function?
What’s the difference between an
organization’s core competencies and its
competitive advantage?
What role does an organization’s culture
play in its strategy?
What is Strategic Management?
2
Business Model
Is a strategic design for how a company intends to profit from its
strategies, work processes, and work activities.
Focuses on two things:
Whether customers will value what the company is providing.
Whether the company can make any money doing that.
Why Strategic Management is
Important
1.
It results in higher organizational performance.
2.
It requires that managers examine and adapt
to business environment changes.
3.
It coordinates diverse organizational units,
helping them focus on organizational goals.
4.
It is very much involved in the managerial
decision-making process.
The Strategic Management
Process
Identifying the organization’s current mission,
goals, and strategies(识别组织现有的使命、目标
和战略）
Doing the external analysis（进行外部分析）
Doing an Internal analysis（进行内部分析）
Formulating strategies（形成战略）
Implementing strategies（实施战略）
Evaluating results（评估结果）
Exhibit 8–1 The Strategic Management Process
Identifying the organization’s
current mission, goals and
strategies
Mission: A statement of the purpose of an
organization--- It tells us how can we to
see our purpose, the ethical rules.
Current goals and strategies gives
managers a basis for assessing whether
those goals and strategies need to be
changed.
相同的使命、不同的目标与战略
Doing an External Analysis
Opportunities: positive trends in external
environmental factors, which the organization
can exploit.
Threats: Negative trends in external
environmental factors, which the organization
must counteract
The same environment can present
opportunities to one organization and pose
threats to another in the same industry because
of their different resources and capabilities.
Identification of Threats and
Opportunities
Doing an Internal Analysis
Resources: An organization’s assets that are used to
develop, manufacture, and deliver products or services
to its customers.
Capabilities: An organization’s skills and abilities in doing
the work activities needed in its business.
Core competencies: the organization’s major valuecreating skills and capabilities that determine its
competitive weapons.
Strengths: Any activities the organization does well or
any unique resources that it has.
Weaknesses: Any activities the organization does not do
well or resources it needs but does not possess.
SWOT-知人者智，自知者明
Internal analysis is much easier in tangible
assets, while intangible assets is hard to
be measured. Culture and reputation are
important, too.
SWOT is an analysis of the organization’s
strengths, weaknesses, opportunities, and
threats.
自我的全面认识－庐山真面目
Formulating Strategies
Develop
and evaluate strategic alternatives
Select
appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match
organizational strengths to
environmental opportunities
Correct
threats
weaknesses and guard against
Implementing Strategies
A strategy is only as good as（简直是） its
implementation.
Implementation:
effectively fitting organizational
structure and activities to the environment.
The
environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its requirements.
Evaluating Results
How effective have the strategies been?
Have they helped the organization reach
its goal?
What adjustments are necessary?
Question
How is SWOT analysis used in the formulation
of appropriate strategies?
In an intensely competitive industry, would it be
wrong for a company to include misleading, or
even false information on its Web site? Why or
why not?
Suppose that the organization’s industry is not
intensely competitive. Would you feel differently?
Types of organizational strategies
Corporate strategy
Business (competitive) strategy
Functional strategy
Relationship of the 3 levels strategies
Corporate strategy
Definition: An organizational strategy that
determines what businesses a company is
in, should be in, or wants to be in, and
what it wants to do with those businesses.
3 main types of corporate strategies:
growth, stability, and renewal（更新、重新
开始）.
Exhibit 8–4 Levels of Organizational Strategy
Growth Strategy1
Definition: A corporate strategy that’s used when
an organization wants to grow and does so by
expanding the number of products offered or
markets served, either through its current
business(es) or through new business(es).
Result: increased sales revenues, number of
employees, market share, or other quantitative
measures.
Growth Strategy2
Growth by increasing its own business
operations: new products, new markets
Growth by vertical integration(纵向一体化）:
backward, forward, or both integration, to be its
own supplier or distributor－－跨产业经营
Growth by horizontal integration（横向一体化）:
combining with other organizations in the same
industry—its competitors. Software took over so
many small competitors and built an kingdom－
－原有产业经营
Forward vertical integration
supplier
manufacture
distributor
Backward vertical integration
customer
多元化的困惑
Growth Strategy3
Growth through diversification, either related or
unrelated.
Related diversification: when a company grows
by combining with firms in different , but related,
industries－－related with vertical integration
Unrelated diversification: when a company
grows by combining with firms in different and
unrelated industries—A steel company merger
An entertainment company
Stability Strategy
Definition: A corporate strategy characterized by an
absence of significant change in what the organization is
currently doing.
Situations:
1,industry is in a period of rapid upheaval with external
forces drastically changing and making the future
uncertain.
2,industry is facing slow or no growth opportunities
3,small businesses often purposefully choose to follow a
stability strategy to avoid hassles（麻烦） of a growing
business.
Renewal Strategy1
Definition: A corporate strategy designed to
address organizational weakness that are
leading to performance declines.
The problem is not serious—retrenchment
strategy(紧缩战略）—a short-run renewal
strategy—help the organization to stabilize
operations, revitalize organizational resources
and capabilities, and prepare to compete once
again.
Renewal Strategy2
The problems are serious—turnaround strategy
（转变战略）—A renewal strategy for situations
in which the organization’s performance
problems are more serious.
Both of the two cut costs and restructure
organizational operations.
The turnaround strategy involved a more
extensive use of measures.
悲哀的裁员
Corporate Portfolio Analysis1
The horizontal axis(横向坐标轴）
represents market share（市场份额）,
from low to high, which means less or
more profits( Is it proper? market share
equals to the ability to gain money?)
The vertical axis(纵向坐标轴） indicates
anticipated market growth（业务增长率）,
from low to high, which means less or
more investment
Exhibit 8–5 The BCG Matrix
Corporate Portfolio Analysis2
Cash cows( 金牛，low growth, high market share): large
amounts of cash, less investment, providing support to
other developing businesses.
Stars (明星，high growth, high market share):
investment requirement always greater than its own
revenue, needing cash support from others.
Question marks( 幼童，high growth, low market share):
need more investment
Dogs( 瘦狗，low growth, low market share): should be
sold off to get some cash to support others.
Corporate Portfolio Analysis3
Use profits from cash cows to invest stars
and question marks and improve them.
Stars should develop into cash cows
Question marks should be considered
carefully and some will be stars, while
others will be sold off.
Dogs should be sold off.
Business Strategy
Definition: An organizational strategy focused on
how the organization will compete in each of its
businesses.
The competitive strategy simply describes how
the company will compete in its primary or main
market.
Strategic Business Units: the single businesses
of an organization in several different
businesses that are independent and formulate
their own strategies.
The Role of Competitive Advantage
Competitive advantage: what sets an
organization apart, its distinctive edge.
It can comes from organization’s core
competencies.
It can comes from organizational
resources.
An effective weapon and only possessed
by itself.
What is your Competitive
Advantage?
Competitive Strategies
Though some industries are inherently
more profitable than others, a company
exploit a competitive advantage is vital in
its ability to make money.
5 competitive forces dictate the rules of
competition in any industry. The 5 forces
determine industry attractiveness and
profitability.
New Entrants
Threats of
new entrants
Bargaining
power of
buyers
buyers
Suppliers
Bargaining
power of
suppliers
Intensity of
Rivalry Among
Current
Competitors
Threat of
substitutes
substitutes
Five Factors
Threat of new entrants(新进入者）: How likely is it that
new competitors will come into the industry?
Threat of substitutes（替代品）: How likely is it that
other industries’ products can be substituted for our
industry’s products?
Bargaining power of buyers: How much bargaining
power do buyers have?
Bargaining power of suppliers: How much bargaining
power do suppliers have?
Current rivalry（竞争对手）: How intense is the rivalry
among current industry competitors?
Three Generic Competitive
Strategies（一般竞争战略）1
Cost leadership strategy（成本领先）: A
business or competitive strategy in which the
organization competes on the basis of having
the lowest costs in its industry.—its quality is
acceptable to buyers.
Differentiation strategy（差异）: A business or
competitive strategy in which a company offers
unique products that are widely valued by
customers.—its significant enough to justify a
price premium that exceeds the cost of
differentiating.
Cost-leadership and Differentiation
Three Generic Competitive
Strategies（一般竞争战略）2
Focus Strategy
Using
a cost or differentiation advantage to
exploit a particular market segment rather a
larger market.
Question
I understand how strategies are
formulated, but how are they implemented?
How often should a company change its
strategies?
Do I have a personal mission statement?
If not, what benefits could I derive from
writing one?
Stuck in the middle(徘徊其间）
Similar to Porter’s generic competitive strategies
The competitive forces in an industry will create a situation
where three companies (full-line generalists) will dominate a
market.
Some firms in the market become “super niche players”（超级利
基玩家） and while others end up as “ditch dwellers.”（深陷困境）
Firms unable to develop either a cost or differentiation advantage
become “stuck in the middle” and lack prospects for long-term
success.
A few firms successfully pursue both differentiation and cost
advantages.
The rule of three
In many industries, 3 major players
emerge to dominate the market.
4 encourages continual price wars
2 tend to monopolistic pricing or mutual
destruction.
Team work
Do a Personal SWOT Analysis
“Strategic Leadership: It’s All About
Vision . . . and More” ,what is your
opinion ?
搜集典型的成长战略、稳定战略与紧缩战
略的例子与大家分享。
Case Study
阅读资料并请进一步搜集资料，分别从联
想、惠普、宏碁、戴尔、苹果的立场来分
析对手，对于未来的移动互联网战略进行
评述。