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United States20-9-1893
Duryea brothers ( Charles and Frank
Duryea) invented one cylinder auto.
Model named as Duryea
Charles established Duryea Motor
Wagon company in 1896
Manufactured 13 cars
And its operation continued till
1920's.
Model -T
Henry ford invented Model T in 1908
500 cars have been manufactured in
black colour
In 1908 it priced at$850, in 1909: $609
and in 1924: $290 which is cheaper
than Horse-driven carriage $400.
Fords revolutionary assembly a car in
21 days to 4 days by its skilled
craftmens.
Advertisement of ford in Sales brochre
proclaimed watch the ford go by high
price quality in a low priced car
Chrysler -Minivan
In 1984 Chrysler invented K
car(minivan)
With in three years it gained a
profit of $1.5 biilion from
minivan
In 1990 it has released sports
utility vechicle
In1998 new light truck,
Chrysler car sales increased
from 7.5 million to 8.2 million
cars in 1998
Roadmap
A Framework for Executing Strategy
The Principal Managerial Components of the Strategy
Execution Process
Building a Capable Organization
Staffing the Organization
Building Core Competencies and Competitive Capabilities
Matching Organization Structure to Strategy
Organizational Structures of the Future
Implementation
involves . . .
Approach to implementation/execution
has be customized to fit the situation
People implement strategies - Not companies!
Strategically-Relevant Competences
Approaches to
Developing Competences
Internal development involves either
Strengthening the companys base of skills, knowledge, and
intellect or
Coordinating and networking the efforts
of various work groups and departments
Building Competences:
Keys to Success
Selecting capable employees
Empowerment
Training
Attractive incentives
Organizational flexibility
Cross-department cooperation
and collaboration
Short deadlines
Good databases
Strategic Role of
Employee Training
Training plays a critical role in implementation when a
firm shifts to a strategy requiring different
Internal universities
Orientation sessions for new employees
Tuition reimbursement programs
Online training courses
Matching Organization
Structure to Strategy
Few hard and fast rules for organizing
One Big Rule: Role and purpose of organization structure is
to support and facilitate good strategy execution!
Vice President
Vice President
Critical
activities
Appeal of Outsourcing
Outsourcing non-critical activities allows a firm to
concentrate its energies and resources on those
value-chain activities where it
Can create unique value
Can be best in the industry
Needs direct control to
Build core competences
Achieve competitive advantage
Manage key customer-supplier-distributor relationships
Dangers of Outsourcing
A company must guard against hollowing out its
knowledge base and capabilities
Way to guard against pitfalls of outsourcing
Avoid sourcing key components from a single supplier
Use two or three suppliers to minimize
dependence on any one supplier
Regularly evaluate suppliers
Work closely with key suppliers
managers
key roles
Primary
activities
Strategic
relationships
Support
functions
Coordination
Valuable
capability
Why Structure
Follows Strategy
Changes in strategy typically require a new or modified
organization structure
A new strategy often involves different skills,
different key activities, and different staffing
and organizational requirements
Hence, a new strategy signals a need to
reassess and often modify the organization
structure
In a decentralized structure
Managers and employees are
empowered to make decisions
Perspectives on Organizing
All basic organization designs have strategy-related
strengths and weaknesses
No ideal organization design exists
To do a good job of matching
structure to strategy
Pick a basic design
Modify as needed
Supplement with appropriate coordinating, networking, and
communication mechanisms to support effective execution of the
strategy
Organizational Structures of
the Future: Overall Themes
Revolutionary changes in how work is organized have
been triggered by
New strategic priorities
Rapidly shifting competitive conditions
The future
structure
will be . . .
Drawbacks of Centralized
Authoritarian Structures
Centralized or authoritarian structures have often
turned out to be a liability where
Customer preferences shift from
standardized to customized products
Product life-cycles grow shorter
Flexible manufacturing replaces
mass production
Customers want to be treated as individuals
Pace of technological change accelerates
Market conditions are fluid
Characteristics of
Organizations of the Future
Fewer barriers between
Change &
Learning
Merger
Acquisition
A transaction where one firm buys another firm with the
intent of more effectively using a core competence by
making the acquired firm a subsidiary within its portfolio of
businesses
Takeover
An acquisition where the target firm did not solicit the bid of
the acquiring firm
Problems in
Achieving Success
Reasons for
Acquisitions
Increased
market power
Integration
difficulties
Overcome
entry barriers
Inadequate
evaluation of target
Cost of new
product development
Large or
extraordinary debt
Increased speed
to market
Acquisitions
Inability to
achieve synergy
Lower risk
compared to developing
new products
Too much
diversification
Increased
diversification
Managers overly
focused on acquisitions
Avoid excessive
competition
Too large
Diversification
Quick way to move into businesses when firm currently lacks
experience and depth in industry
Example: CNETs acquisition of mySimon
Overly Diversified
Acquirer doesnt have expertise required to manage
unrelated businesses
Example: GE--prior to selling businesses and refocusing
Too Large
Large bureaucracy reduces innovation and flexibility
+ Friendly Acquisitions
Friendly deals make integration go more smoothly
Low-to-Moderate Debt
Merged firm maintains financial flexibility
Flexibility
Has experience at managing change and is
flexible and adaptable
Emphasize Innovation
Continue to invest in R&D as part of the
firms overall strategy
Restructuring Activities
Downsizing
Wholesale reduction of employees
Example: Procter & Gambles cutting of its
worldwide workforce by 15,000 jobs
Downscoping
Selectively divesting or closing non-core businesses
Reducing scope of operations
Leads to greater focus
Example: Disneys selling of Fairchild Publications
Restructuring Activities
Leveraged Buyout (LBO)
A party buys a firms entire assets in order to take the
firm private.
Example: Forsmann Littles buyout of Dr. Pepper
Downsizing
Downscoping
Leveraged
Buyout
Short-Term
Outcomes
Long-Term
Outcomes
Downsizing
Short-Term
Outcomes
Reduced
Labor Costs
Long-Term
Outcomes
Loss of
Human Capital
Lower
Performance
Downsizing
Short-Term
Outcomes
Reduced
Labor Costs
Long-Term
Outcomes
Loss of
Human Capital
Reduced
Debt Costs
Lower
Performance
Emphasis on
Strategic Controls
Higher
Performance
Downscoping
Downsizing
Short-Term
Outcomes
Reduced
Labor Costs
Long-Term
Outcomes
Loss of
Human Capital
Reduced
Debt Costs
Lower
Performance
Emphasis on
Strategic Controls
Higher
Performance
High Debt
Costs
Higher Risk
Downscoping
Leveraged
Buyout
Corporate Entrepreneurship
and Innovation
What is
entrepreneurship?
Defined simply, it is . . .
New Entry
Products
&
New
Existing
Services
Established
Defining Entrepreneurship
Corporate Entrepreneurship
Firms capabilities to develop new goods or
services and manage the innovation process
Invention
Creating or developing a new product or process idea
Innovation
Creating a commercializable product from invention
Imitation
Adoption of innovation by a population of similar firms
An Entrepreneurial Orientation
consists of Five Dimensions
Innovativeness
Risk Taking
Proactiveness
Competitive Aggressiveness
Autonomy
INNOVATIVENESS
A willingness to support creativity and
experimentation in introducing new
products/services, and novelty,
technological leadership and R&D in
developing new processes; key is using
creative insights to achieve innovative
solutions.
RISK TAKING
A tendency to take bold actions by
venturing into the unknown and/or
committing a large portion of
resources to ventures with
uncertain outcomes; key is to
reduce uncertainty by effective risk
assessment.
PROACTIVENESS
A response to opportunities; occurs
when a firm has an opportunityseeking, forward-looking
perspective characterized by
introducing new products or
services ahead of the competition
and acting in anticipation of future
demand.
COMPETITIVE
AGGRESSIVENESS
A response to threats; refers to
the intensity of a firm's effort to
outperform industry rivals,
characterized by a strong offensive
posture or an aggressive
responses to competitor actions.
AUTONOMY
Independent action taken by
entrepreneurial champions or teams
aimed at bringing forth a new
venture and carrying it through to
completion.
Successful Entrepreneurship
The key to success with entrepreneurship and
innovation is moving from the invention of ideas
to effective commercialization and acceptance in
the marketplace
Competitive
Competitive
Advantage
Advantage
Create it!
Co-opt it!
Buy it!
Time to
Market
CrossFunctional
Integration/
Design Teams
Product
Quality
Creation of
Customer
Value
Value
Appropriation
from
Innovation
Thank You
Please forward your query
To: vstomar@amity.edu