STRATEGIC MANAGEMENT

The basis of the strategy: structure

Structure is the assignment and control of work tasks and there are two structures: vertical and horizontal

Functional Structure

Divide the organization into its main activities or functions, a manager is in charge of each function under the control of the senior manager.

Advantage

Resources used efficiently, wide division of labor, encourages communication between specialists, promotes economies of scale, among others.

Disadvantages

Greater need for interdepartmental coordination and programming, conflicts, little creativity and innovation.

Estructura Divisional

It helps to overcome limitations of the functional structure because it contains functional specialists who group their activities around products or geographic regions.

Advantage

coordination between functional departments, product or project identification, adaptation to changing environments.

Disadvantages

There can be costly duplication of resources between departments, competing demands from people create stress.

too much control stifles innovation.

Product structure

People and resources are grouped according to the product. This format is very successful when there is a variety of products, of which are directed to different markets.

Graphic structure

Organizations with few products group activities according to the sales area in search of being closer to the customer.

Matrix structure

seeks to add flexibility and lateral coordination to the traditional vertical hierarchy.

people can have dual roles.

Advantage

Improves decision-making, direct contact, improves communication and cooperation, adaptation to changing environments, unknown and unexpected problems.

Disadvantages

Hampered professional development, confusion, project managers reluctant to impose authority.

Complex forms of organization

Complex forms seek to overcome deficiencies of other structures through the collaboration of existing organizations.

forms of complex organization:

Mergers

Joint Ventures

Consortia

Alliances

levels and strategy formulation

A strategy is a future action plan, undertaken by senior management, seeking to achieve goals and objectives by giving a sense of purpose and direction to the organization.

They may be:

Strategy process

The strategic direction is the organized development of the resources of the functional areas in the achievement of objectives, guiding the scope and direction of the entity.

Strategy Lessons

Corporate strategy, related to the formula and future structures of the company

Commercial or competitive strategy, products or services to be developed.

Operational or functional strategies, examines the different functions of the business identifying support for corporate and commercial strategies.

Strategy types

Purposeful and deliberate strategy, arise from precise intentions, written and imposed by a central leadership

Emerging strategy, there is a corporate intention followed by its implementation

Opportunistic strategy, can arise in a business way, taking advantage of changes in the environment or recognizing new skills in an opportunistic way. active search for new opportunities.

Imposed strategy can be imposed on the organization.

Other types of strategic formulation

Muddling through,

Logical incrementalism

Crafts

Adaptive mode

Schools of strategy

Described below

The planning school

It is based on past trends, forecasts, and stable structures and environments.

Use a bureaucratic and rational way

Seeks a fit between the organizational strategy and its environment

Requires detailed and flexible planning

The positional school

the focus is on a rational and analytical approach to strategy making

tries to place the organization and products in a favorable market

It is based on performance measurement tools and decision making

Porter Competitive Advantage Factors, BCG Matrix, GE Matrix

The resource-based school

Look at the internal environment instead of the market, approach from the inside out.

Competitive advantage is based on your own distinctive resources, capabilities and competencies.

The stakeholder theory

They are groups or individuals who have an interest in the welfare of the company

classification

internal stakeholders:

Entrepreneurs, managers, non-managerial employees, employees.

connected stakeholders:

Customers and end consumers, suppliers, competitors

External stakeholders: governments, lobby groups, etc.

Governments, pressure groups.

External analysis

Its benefits include increasing management awareness of environmental changes, understanding environments and context, facilitating risk management, acting as an early warning system.

In this there are two levels:

The distant or macro environment

PEST. Political, economic, social and technological influences

PESTEL

STEEPV

GASTADO

STEEPLE

The nearby environment

Entry barriers

The higher they are, the greater the potential profitability of companies in the industry.

includes factors such as: capital requirements, economies of scale, differentiation, switching costs, brand identity, access to distribution channels, threat of retaliation.

Competitive rivalry

The intensity of the competition depends on factors such as: whether or not there is a leader, the presence of exit barriers, the importance of fixed costs to determine the capacity, the grade of the product.

Provider power

Determined by factors such as: importance of the product, switching costs, degree of concentration of the supplier in an industry and ability to supply.

Purchasing power

It depends on: knowledge of the buyer, size of the purchase, function of the product, degree of concentration of the buyer in an industry.

internal analisis

Internal organization can affect the cost and viability of some strategies

Each of the organization's activities can be considered as an added value to the products.

Main activities

the incoming logistics

outbound logistics

Sales Marketing

service

Support activities

Acquisitions

Technological development

Human resource management

infrastructure

culture

Set of beliefs, customs, practices and ways of thinking that are shared through work and coexistence.

There are two types:

Organizational

It's a deeply ingrained unconscious pattern

Corporate

it is seen as four types of power and control operated through organizational structure.

SWOT analysis

Analyze internal strengths and weaknesses and external opportunities and threats.

With the purpose of:

Identify strategies that adjust or match the resources and capacities of the organization with the demands of the environment in which it competes.

In this it is necessary to take advantage of the strengths and opportunities, counteract the threats and correct the weaknesses of the organization.

Internal

Strengths

Basic skills, adequate economic resources, market leaders, functional area strategies, access to economies of scale, proprietary technology, innovation skills, among others.

Weaknesses

The strategic direction is not clear, obsolete facilities, profitability problems, lack of skills and competencies, weak market image, high costs, among others.

External

Opportunities

Ability to expand into new markets, expand product line, drop trade barriers, ability to grow rapidly, new emerging technologies, among others.

Threats

Entry of new competitors, substitute products, slow market growth, demographic changes, changes in buyer needs and tastes, among others.

generic strategy

A well-formulated strategy seeks to build distinctive competence in some key activity and then use it to create a competitive advantage over other companies.

generic strategies are widely applicable to companies of all sizes and in all industries.

There are two types of competitive strategies:

Leadership

It aims to achieve a competitive advantage by providing a product or service at a lower cost than rivals.

Differentiation

It enables the company to make efforts to distinguish its products from those of its rivals.

strategy implementation

This process has several parts:

1. Resource planning and implementation logistics.

skills and resources (what the organization can realistically do)

Social responsibility: what the organization should do

Managerial interests and wishes: (what the organization wants to do)

2. the organizational structure may need to be changed

3. The systems used to manage the organizations can be improved.