REVIEW ORGANIZATION STRATEGY Chiến Lược Tổ Chức

Contents: Review Organization Strategy
CHAPTER 1: What Is Strategy and Why Is It Important?...........................................................3
1.WHAT DO WE MEAN BY STRATEGY?...........................................................................................3
2. Basic Strategy Approaches:.........................................................................................................6
3. Competitive Advantage.................................................................................................................7
4. A COMPANY’S STRATEGY AND ITS BUSINESS MODEL........................................................7
6. KEY POINTS.........................................................................................................................................8
Chapter 2: Charting a Company’s Direction Its Vision, Mission, Objectives, and
Strategy........................................................................................................................................................10
1.WHAT DOES THE STRATEGY-MAKING, STRATEGY-EXECUTING PROCESS ENTAIL?. 10
2. STAGE 1: DEVELOPING A STRATEGIC VISION, MISSION STATEMENT, AND SET OF
CORE VALUES........................................................................................................................................11
Vision....................................................................................................................................................11
Mission:................................................................................................................................................11
Values:..................................................................................................................................................11
3. STAGE 2: SETTING OBJECTIVES.................................................................................................11
Objectives:..........................................................................................................................................11
4. KEY POINTS.......................................................................................................................................12
CHAPTER 3: Evaluating a Company’s External Environment................................................14
1. The Six Principal Components of THE COMPANY’S MACRO-ENVIRONMent............14
The macro-environment encompasses the broad environmental context in which
a company’s industry is situated..............................................................................................14
PESTEL analysis can be used to assess the strategic relevance of the six
principal components of the macro-environment: Political, Economic, Social,
Technological, Environmental, and Legal/2Regulatory forces......................................14
2. THE FIVE FORCES FRAMEWORK................................................................................................16
Rivalry/Competitive Pressures Created by the Rivalry among Competing Sellers
.................................................................................................................................................................18
Vũ Khí Cạnh Tranh chính: The Choice of Competitive Weapons..................................19
New Entrants: Competitive Pressures Associated with the Threat of New
Entrants...............................................................................................................................................20

Substitute: Competitive Pressures from the Sellers of Substitute Products...........21
Supplier: Competitive Pressures Stemming from Supplier Bargaining Power........22


Buyer: Competitive Pressures Stemming from Buyer Bargaining Power and Price
Sensitivity...........................................................................................................................................23
3. Limitations of the Five Competitive Forces..........................................................................................23
4. Analysis of external environment............................................................................................23
5. KEY POINTS.......................................................................................................................................24
CHAPTER 4: Evaluating a Company’s Resources, Capabilities, and Competitiveness
.........................................................................................................................................................................26
1. Identifying the Components of a Single-Business Company’s Strategy..................26
2. RESOURCES AND CAPABILITIES:...............................................................................................26
Types of Company Resources.....................................................................................................27
Resources # Capability.................................................................................................................28
3. VRIO: Assessing the Competitive Power of a Company’s Resources and
Capabilities.............................................................................................................................................28
4. SWOT: WHAT ARE THE COMPANY’S STRENGTHS AND WEAKNESSES IN RELATION
TO THE MARKET OPPORTUNITIES AND EXTERNAL THREATS?..........................................29
5. COMPANY’S VALUE CHAIN: HOW DO A COMPANY’S VALUE CHAIN ACTIVITIES
IMPACT ITS COST STRUCTURE AND CUSTOMER VALUE PROPOSITION?.......................29
6. KEY POINTS.......................................................................................................................................32
CHAPTER 5: The Five Generic Competitive Strategies.............................................................34
1.TYPES OF GENERIC COMPETITIVE STRATEGIES...................................................................34
2. LOW-COST PROVIDER STRATEGIES...........................................................................................35
Cost-Efficient Management of Value Chain Activities.......................................................35
Sửa chữa, cải tạo: Revamping of the Value Chain System to Lower Costs.....................37
3. BROAD DIFFERENTIATION STRATEGIES..................................................................................38
Managing the Value Chain to Create the Differentiating Attributes...........................38
Revamping the Value Chain System to Increase Differentiation.................................40

4. Low-cost # Differentiation......................................................................................................................41
CHAPTER 6: Strengthening a Company’s Competitive Position...........................................43
1. HORIZONTAL MERGER AND ACQUISITION STRATEGIES: hợp nhất + mua lại........43
2. The Disadvantages of a Vertical Integration Strategy....................................................45
3. KEY POINTS.......................................................................................................................................46
CHAPTER 7: Strategies for Competing in International Markets..........................................48
1.WHY COMPANIES DECIDE TO ENTER FOREIGN MARKETS...............................................48
2. The Choice of Entry Modes: A Decision Model.....................................................................................49


3. KEY POINTS.............................................................................................................................................52
CHAPTER 8: Corporate Strategy........................................................................................................54
1. KEY POINTS........................................................................................................................................54


CHAPTER 1: What Is Strategy and Why Is It
Important?

1.WHAT DO WE MEAN BY STRATEGY?
- Definition: A company’s strategy is the set of actions that its managers take to outperform ( làm tốt
hơn) the company’s competitors and achieve superior profitability.

Strategy Is about Competing Differently
Strategy is about competing differently from rivals—doing what competitors don’t do or, even better,
doing what they can’t do!

-

appealing to buyers in ways that set a company apart from its rivals and
staking out a market position that is not crowded with strong competitors.

Strategy and the Quest for Competitive Advantage
A company achieves a competitive advantage when it provides buyers
with superior value compared to rival sellers or offers the same value at a
lower cost to the firm. The advantage is sustainable (or durable) if it
persists despite the best efforts of competitors to match or surpass this
advantage.

Why a Company’s Strategy Evolves over Time: tại sao
chiến lược công ty tiến hóa theo time
A company’s strategy tends to evolve because of changing circumstances
and ongoing efforts by management to improve the strategy.


Changing circumstances and ongoing (liên tục) management efforts to
improve the strategy cause a company’s strategy to evolve overtime—
a condition that makes the task of crafting (xây dựng) strategy a work
in progress, not a one-time event
A company’s strategy is shaped partly by management analysis and
choice and partly by the necessity of adapting and learning by doing.

A Company’s Strategy Is Partly Proactive and Partly
Reactive: chiến lược công ty là 1 phần sáng tạo, hoạt
động + 1 phần phản ứng
A Company’s Strategy Is a Blend of Proactive Initiatives (sáng kiến chủ động)
and Reactive Adjustments
(1)proactive, planned initiatives to improve the company’s financial
performance and secure a competitive edge
(2)reactive responses to unanticipated developments and fresh market

conditions.
A company’s deliberate strategy (chiến lược có chủ ý) consists of
proactive strategy elements that are planned;
its emergent strategy ( chiến lược nổi lên ) consists of reactive strategy
elements that emerge as changing conditions warrant.


THE IMPORTANCE OF CRAFTING AND EXECUTING
STRATEGY
Crafting and executing strategy are core management functions. How well a
company performs and the degree of market success it enjoys are directly
attributable to the caliber of its strategy and the proficiency with which the
strategy is executed.
First, a clear and reasoned strategy is management’s prescription for doing
business,
its road map to competitive advantage, its game plan for pleasing customers,
and its
formula for improving performance. High-performing enterprises are nearly
always
the product of astute, creative, and proactive strategy making. Companies
don’t get to
the top of the industry rankings or stay there with flawed strategies, copycat
strategies,
or timid attempts to try to do better or lucky breaks or the good fortune of
having
stumbled into the right market at the right time with the right product.
Second, even the best-conceived strategies will result in performance
shortfalls if
they are not executed proficiently. The processes of crafting and executing
strategies

must go hand in hand if a company is to be successful in the long term.

Good Strategy + Good Strategy Execution = Good
Management

2. Basic Strategy Approaches:
A low-cost provider strategy—achieving a cost-based advantage over rivals.
Low-cost provider strategies can produce a durable competitive edge when
rivals find it hard to match the low-cost leader’s approach to driving costs out
of the business.
EX: Walmart and Southwest Airlines have earned strong market positions
because of the low-cost advantages they have achieved over their rivals.
2. A broad differentiation strategy—seeking to differentiate the company’s
product
or service from that of rivals in ways that will appeal to a broad spectrum of
buyers. One way to sustain this type of competitive advantage is to be
sufficiently innovative to thwart the efforts of clever rivals to copy or closely
imitate the product offering
1.


EX: Apple (innovative products), Johnson & Johnson in baby products (product
reliability), LVMH (luxury and prestige), and BMW (engineering design and
performance)
3. A focused low-cost strategy—concentrating on a narrow buyer segment (or
market
niche) and outcompeting rivals by having lower costs and thus being able to
serve
niche members at a lower price
4. A focused differentiation strategy—concentrating on a narrow buyer segment

(or
market niche) and outcompeting rivals by offering buyers customized
attributes
that meet their specialized needs and tastes better than rivals’ products.
EX: Lululemon, for example, specializes in high-quality yoga clothing and the
like, attracting a devoted set of buyers in the process. Jiffy Lube International
in quick oil
changes, McAfee in virus protection software, and The Weather Channel in
cable
TV provide some other examples of this strategy.

5.

A best-cost provider strategy—giving customers more value for the
money by
satisfying their expectations on key quality features, performance, and/or
service
attributes while beating their price expectations. This approach is a hybrid
strategy that blends elements of low-cost provider and differentiation
strategies; the
aim is to have lower costs than rivals while simultaneously offering better
differentiating attributes. Its dual focus on low costs as well as differentiation
shows how a
best-cost provider strategy can offer customers great value for the money.
EX: Target is an example of a company that is known for its hip product
design (a reputation it built by featuring limited edition lines by designers (a
reputation it built by featuring limited edition lines by designers such as Jason
Wu), as well as a more appealing shopping ambience for discount store
shoppers.

3. Competitive Advantage




Definition: Requires meeting customer needs either more effectively ( with
products and services that customers value more highly) or more efficiently
( by providing products or services at a lower cost to customers)
Characteristics:
o Different & better than rivals
o Set of many different advantages
o Sustainable: require giving buyer lasting reasons to prefer a firm’s
products or services over those of its competitor.


4. A COMPANY’S STRATEGY AND ITS
BUSINESS MODEL
A company’s business model sets forth the logic for how its strategy will
create value for customers and at the same time generate revenues
sufficient to cover costs and realize a profit.
A business model is management’s blueprint for delivering a valuable
product or service to customers in a manner that will generate revenues
sufficient to cover costs and yield an
attractive profit. The two elements of a company’s business model are
(1) its customer value proposition
(2) its profit formula.

6.

KEY POINTS

1. A company’s strategy is its game plan to attract customers, outperform its
competitors, and achieve superior profitability.
2. The central thrust of a company’s strategy is undertaking moves to build and
strengthen
the company’s long-term competitive position and financial performance by
competing differently from rivals and gaining a sustainable competitive advantage
over them.
3. A company achieves a competitive advantage when it provides buyers with
superior value compared to rival sellers or offers the same value at a lower cost to
the firm. The advantage is sustainable if it persists despite the best efforts of
competitors to match or surpass this advantage.


4. A company’s strategy typically evolves over time, emerging from a blend of
(1) proactive deliberate actions on the part of company managers to improve the
strategy and
(2) reactive emergent responses to unanticipated developments and fresh market
conditions.
5. A company’s business model sets forth the logic for how its strategy will create
value for customers and at the same time generate revenues sufficient to cover
costs and realize a profit. Thus, it contains two crucial elements:
(1) the customer value proposition—a plan for satisfying customer wants and needs
at a price customers will consider good value, and
(2) the profit formula—a plan for a cost structure that will enable the company to
deliver the customer value proposition profitably. These elements are illustrated by
the value-price-cost framework.
6. A winning strategy will pass three tests:
(1) fit (external, internal, and dynamic consistency),
(2) competitive advantage (durable competitive advantage), and

(3) performance (outstanding financial and market performance).
7. Crafting and executing strategy are core management functions. How well a
company performs and the degree of market success it enjoys are directly
attributable to
the caliber of its strategy and the proficiency with which the strategy is executed.


Chapter 2: Charting a
Company’s Direction Its Vision,
Mission, Objectives, and Strategy.
1.WHAT DOES THE STRATEGY-MAKING, STRATEGY-EXECUTING
PROCESS ENTAIL?

1. Developing a strategic vision that charts the company’s long-term direction, a
mission statement that describes the company’s purpose, and a set of core values
to guide the pursuit of the vision and mission.
2. Setting objectives for measuring the company’s performance and tracking its
progress in moving in the intended long-term direction.
3. Crafting a strategy for advancing the company along the path management has
charted and achieving its performance objectives.
4. Executing the chosen strategy efficiently and effectively.
5. Monitoring developments, evaluating performance, and initiating corrective
adjustments in the company’s vision and mission statement, objectives, strategy,


or approach to strategy execution in light of actual experience, changing conditions,
new ideas, and new opportunities.

2. STAGE 1: DEVELOPING A STRATEGIC VISION, MISSION
STATEMENT, AND SET OF CORE VALUES

Vision
A strategic vision describes management’s aspirations for the company’s future
and the course and direction charted to achieve them.
An effectively communicated vision is a valuable management tool for
enlisting the commitment of company personnel to actions that move the
company in the intended long-term direction
Mission:
The distinction between a strategic vision and a mission statement is fairly clearcut: A strategic vision portrays a company’s aspirations for its future (“where we
are going”), whereas a company’s mission describes the scope and purpose of its
present business (“who we are, what we do, and why we are here”).
To be well worded, a company mission statement must employ language
specific enough to distinguish its business makeup and purpose from those of
other enterprises and give the company its own identity
Values:
A company’s values are the beliefs, traits, and behavioral norms that company
personnel are expected to display in conducting the company’s business and
pursuing its strategic vision and mission.

3. STAGE 2: SETTING OBJECTIVES
Purpose: why a business exists (should exit)

Objectives:
are an organization’s performance targets—the specific results management wants
to achieve.

Stretch objectives set performance targets high enough to stretch an
organization to perform at its full potential and deliver the best possible
results.
A company exhibits strategic intent (ý định chiến lược) when it
relentlessly pursues an ambitious strategic objective, concentrating the full

force of its resources and competitive actions on achieving that objective.

What Kinds of Objectives to Set
Two distinct types of performance targets are required: those relating to financial
performance and those relating to strategic performance. Financial objectives


communicate management’s goals for financial performance. Strategic objectives
are goals concerning a company’s marketing standing and competitive position.
Financial objectives relate to the financial performance targets management has
established for the organization to achieve.
Strategic objectives relate to target outcomes that indicate a company is strengthening its
market standing, competitive position, and future business prospects

The Need for a Balanced Approach to Objective Setting
The Balanced Scorecard is a widely used method for combining the use of both strategic and
financial objectives, tracking their achievement, and giving management a more complete and
balanced view of how well an organization is performing.

Setting Objectives for Every Organizational Level
4. KEY POINTS
The strategic management process consists of five interrelated and integrated
stages:
1. Developing a strategic vision of the company’s future, a mission statement that
defines the company’s current purpose, and a set of core values to guide the
pursuit of the vision and mission. This stage of strategy making provides direction
for the company, motivates and inspires company personnel, aligns and guides
actions throughout the organization, and communicates to stakeholder
management’s aspirations for the company’s future.
2. Setting objectives to convert the vision and mission into performance targets

that
can be used as yardsticks for measuring the company’s performance. Objectives
need to spell out how much of what kind of performance by when. Two broad types
of objectives are required: financial objectives and strategic objectives. A balanced
scorecard approach for measuring company performance entails setting both
financial objectives and strategic objectives. Stretch objectives spur exceptional
performance and help build a firewall against complacency and mediocre
performance. A company exhibits strategic intent when it relentlessly pursues an
ambitious strategic objective, concentrating the full force of its resources and
competitive actions on achieving that objective.
3. Crafting a strategy to achieve the objectives and move the company along the
strategic course that management has charted. Masterful strategies come from
doing things
differently from competitors where it counts—out-innovating them, being more
efficient, being more imaginative, adapting faster—rather than running with the
herd.
In large diversified companies, the strategy-making hierarchy consists of four levels,
each of which involves a corresponding level of management: corporate strategy
(multibusiness strategy), business strategy (strategy for individual businesses that
compete in a single industry), functional-area strategies within each business (e.g.,
marketing, R&D, logistics), and operating strategies (for key operating units, such as


manufacturing plants). Thus, strategy making is an inclusive collaborative activity
involving not only senior company executives but also the heads of major business
divisions, functional-area managers, and operating managers on the frontlines.
4. Executing the chosen strategy and converting the strategic plan into action.
Management’s agenda for executing the chosen strategy emerges from assessing
what the company will have to do to achieve the targeted financial and strategic
performance. Management’s handling of the strategy implementation process can

be considered successful if things go smoothly enough that the company meets or
beats its strategic and financial performance targets and shows good progress in
achieving management’s strategic vision.
5. Monitoring developments, evaluating performance, and initiating corrective
adjustments in light of actual experience, changing conditions, new ideas, and new
opportunities. This stage of the strategy management process is the trigger point
for deciding whether to continue or change the company’s vision and mission,
objectives, strategy, and/or strategy execution methods.
The sum of a company’s strategic vision, mission, objectives, and strategy
constitutes a strategic plan for coping with industry conditions, outcompeting rivals,
meeting objectives, and making progress toward aspirational goals.
Boards of directors have a duty to shareholders to play a vigilant role in overseeing
management’s handling of a company’s strategy-making, strategy-executing
process.
This entails four important obligations:
(1) Ensure that the company issues accurate financial reports and has adequate
financial controls;
(2) critically appraise the company’s direction, strategy, and strategy execution
(3) evaluate the caliber of senior executives’ strategic leadership skills; and
(4) institute a compensation plan for top executives that rewards them for actions
and results that serve stakeholder interests, most especially those of shareholders


CHAPTER 3: Evaluating a Company’s
External Environment
1.

The Six Principal Components

ENVIRONMent.

of THE COMPANY’S MACRO-


The macro-environment encompasses the broad environmental context in
which a company’s industry is situated.
PESTEL analysis can be used to assess the strategic relevance of the six
principal components of the macro-environment:
Political, Economic, Social, Technological, Environmental, and
Legal/2Regulatory forces.

Political factors
Pertinent political factors include matters such as tax policy, fiscal policy,
tariffs, the political climate, and the strength of institutions such as the
federal banking system. Some political policies affect certain types of
industries more than others. An example is energy policy, which clearly
affects energy producers and heavy users of energy more than other types of
businesses.
Economic conditions


Economic conditions include the general economic climate and specific
factors such as interest rates, exchange rates, the inflation rate, the
unemployment rate, the rate of economic growth, trade deficits or surpluses,
savings rates, and per-capita domestic product. Some industries, such as
construction, are particularly vulnerable to economic downturns but are
positively affected by factors such as low interest rates. Others, such as
discount retailing, benefit when general economic conditions weaken, as
consumers become more price-conscious.
Sociocultural forces

Sociocultural forces include the societal values, attitudes, cultural influences,
and lifestyles that impact demand for particular goods and services, as well
as demographic factors such as the population size, growth rate, and age
distribution. Sociocultural forces vary by locale and change over time. An
example is the trend toward healthier lifestyles, which can shift spending
toward exercise equipment and health clubs and away from alcohol and
snack foods. The demographic effect of people living longer is having a huge
impact on the health care, nursing homes, travel, hospitality, and
entertainment industries.
Technological factors
Technological factors include the pace of technological change and technical
developments that have the potential for wide-ranging effects on society,
such as genetic engineering, nanotechnology, and solar energy technology.
They include institutions involved in creating new knowledge and controlling
the use of technology, such as R&D consortia, university sponsored
technology incubators, patent and copyright laws, and government control
over the Internet. Technological change can encourage the birth of new
industries, such as the connected wearable devices, and disrupt others, such
as the recording industry.
Environmental forces
These include ecological and environmental forces such as weather, climate,
climate change, and associated factors like water shortages. These factors
can directly impact industries such as insurance, farming, energy production,
and tourism. They may have an indirect but substantial effect on other
industries such as transportation and utilities.


Legal and regulatory factors
These factors include the regulations and laws with which companies must
comply, such as consumer laws, labor laws, antitrust laws, and occupational

health and safety regulation. Some factors, such as financial services
regulation, are industry-specific. Others, such as minimum wage legislation,
affect certain types of industries (low-wage, labor-intensive industries) more
than others.

2. THE FIVE FORCES FRAMEWORK
The character and strength of the competitive forces operating in an industry are
never
the same from one industry to another. The most powerful and widely used tool for
diagnosing the principal competitive pressures in a market is the five forces
framework.
Competitive pressures on companies within an industry come from five sources.
These include
(1) competition from rival sellers,
(2) competition from potential new entrants to the industry,
(3) competition from producers of substitute products,
(4) supplier bargaining power, and
(5) customer bargaining power.


Using the five forces model to determine the nature and strength of competitive
pressures in a given industry involves three steps:
∙ Step 1: For each of the five forces, identify the different parties involved, along
with the specific factors that bring about competitive pressures.
∙ Step 2: Evaluate how strong the pressures stemming from each of the five forces
are (strong, moderate, or weak).
∙ Step 3: Determine whether the five forces, overall, are supportive of high industry
profitability.

Rivalry/Competitive Pressures Created by the Rivalry

among Competing Sellers


Vũ Khí Cạnh Tranh chính: The Choice of Competitive
Weapons


New Entrants: Competitive Pressures Associated with the
Threat
of New Entrants


Substitute: Competitive Pressures from the Sellers
of Substitute Products


Supplier: Competitive Pressures Stemming from Supplier
Bargaining Power


Buyer: Competitive Pressures Stemming from Buyer
Bargaining Power and Price Sensitivity


3. Limitations of the Five Competitive Forces





4.

Does not account for external factors such as governmental or societal
factors
View other partners as competitors, not potential allies (đồng minh)
Only useful for analyzing industries or markets, can’t explain why some
firms perform better than the others in the same industry.
The role of complements (enhance value the products provide)

Analysis of external environment






PESTEL Analysis
Five Forces Framework
Value net: p66-68
Strategy Group Analysis: p71 – several guidelines: 5 factors
Competitor Analysis: p74

Page 76: key success factor.
5. KEY POINTS