CRAFTING STRATIGIES

ARBAB MUHAMMAD ARIF KHALIL

MBA - G13-0139

Crafting Strategy
A

company's strategy represents management's answers to

such fundamental business questions as :

whether to concentrate on a single business or build a
diversified group of businesses

Crafting
a to cater to a broad range of customers or focus on a
whether
strategy
to market niche
particular
achieve
theto develop a wide or narrow product line
whether
desired
Pursue a competitive advantage based on
outcomes
I.Low cost
II.Product superiority
III.
Unique organizational capabilities
IV.
Differentiated products
V.Service advantage
VI.
Terms or conditions of payment

Factors Shaping the Choice of Company

Strategy
External Factors
Economic, societal,
political, and
government
regulations

Competitive
conditions and
industry
attractiveness

The mix of considerations that determines

a companys strategic situation

Company
strengths
and weaknesses,
competencies and
capabilities

Company
opportunity and
threat

Determine
relevance of
internal and
external factors

Personal ambitions
and business
philosophies of key
executives

Internal Factors

Identify
and
evaluate
alternativ
es

Shared values and

company culture

Craft
the
strate
gy

Factors Shaping the Choice of Company

Strategy
What

an

enterprise

can

and

cannot

do

strategy wise is always constrained by what is

legal, by what complies with government
policies and regulatory requirements, by what
is considered ethical, and by what is in accord
with societal expectations and the standards
of good social and community citizenship.
Economic, societal, political, and government regulations

Factors Shaping the Choice of Company

Strategy

An industry's competitive conditions and overall

attractiveness

are

big

strategy-determining

factors.

A company's strategy has to be tailored to the

nature and mix of competitive factors in play
price,

product

quality,

performance

service, warranties, and so on

Competitive conditions and industry

attractiveness

features,

Factors Shaping the Choice of Company

Strategy

A company's strategy needs to be deliberately

aimed at capturing its best growth opportunities,
especially the ones that hold the most promise
for building sustainable competitive advantage
and enhancing profitability.

Strategy should also provide a defense against

external threats to the company's well-being and
future performance.

Company opportunity and threat

Factors Shaping the Choice of Company

Strategy

One of the most pivotal strategy-shaping internal

considerations is whether a company has or can
acquire

the

capabilities

resources,
needed

to

competencies,
execute

and

strategy

proficiently.

The best path to competitive advantage is found

where

firm

has

competitively

valuable

resources and competencies, where rivals can't

develop comparable capabilities except at high
cost or over an extended period of time.

Factors Shaping the Choice of Strategy

Managers do not dispassionately assess

what strategic course to steer.

Their choices are typically influenced by

their own vision of how to compete and how
to position the enterprise and by what
image and standing they want the company
to have.
Personal ambitions and business
philosophies of key executives

Factors Shaping the Choice of Company

Strategy

An

organization's

policies,

practices,

traditions, philosophical beliefs, and ways of

doing things combine to create a distinctive
culture.

The stronger a company's culture, the more

that culture is likely to shape the company's
strategic

actions,

sometimes

even

dominating the choice of strategic moves.

Shared values and company culture

Why Strategic Evolve

a)

Shifting market conditions;

b)

Fresh moves of competitors;

c)

New technologies and innovations;

d)

Evolving customers prefrences;

e)

Political and regulatory changes;

f)

New windows of oppurtunities

g)

Crisis situations.

What should be done in Crafting

Strategies
The

Goodness of Fit Test

The

Competitive Advantage Test

The

Performance Test

Initiate

of functional areas

Addressing
Strategic

issues

What should be done in Crafting

Strategies

A good strategy has to be well matched

to industry and competitive conditions,
market opportunities and threats, and
other aspects of the enterprise's external
environment.

At the same time, it has to be tailored to

the company's resource strengths and
weaknesses,

competencies,

competitive capabilities.

and

What should be done in Crafting

Strategies

A good strategy leads to sustainable

competitive advantage.

The bigger the competitive edge that a

strategy helps build, the more powerful
and effective it is.

What should be done in Crafting

Strategies

A good strategy boosts company

performance.

Two kinds of performance

improvements are the most telling of
a strategy's caliber: gains in
profitability and gains in the
company's competitive strength and
long-term market position

What should be done in Crafting

Strategies

Uniting

strategic initiatives of
Functional area; and
Addressing strategic issues
facing the company

Characteristics of Strategy Making

a)

Strategy is action-oriented

b)

Strategy evolves over time

c)

Strategy-making is never ending or

ongoing concern

d)

Meaningful strategy is time and outputoriented

e)

Strategy requires the participation of all

parties

The HOWs in Crafting

the Firms Strategy
The
Company strategies concern how:
HOWs in
how to grow the business
Crafting
how to satisfy customers
the Firms
Strategy
how to outcompete rivals
how to respond to changing market conditions
how to manage each functional piece of the
business and develop needed organizational
capabilities
how to achieve strategic and financial
objectives

Timing in Crafting Strategies

a)

Customer needs and competitive

conditions change;

b)

New opportunities appear; technology

advance; any number of other outsides
developments occurs;

c)

One or more aspects of executing the

strategy may not be going well;

d)

New mangers with ideas take over; and

e)

Organizational learning occurs.

Proactive or Reactive Strategy

Strategy or developing strategy may
Proactive
or
self driven among top management
reactive
members or a reaction to a certain
Strategy

be

situation brought about by triggering

points or other factors and considerations
that necessitate such a strategy.

Proactive or Reactive Strategy

Proactive or
reactive
Strategy

Rule Breaking Strategies

Challenge

fundamental conventions

by

reconceiving a product or service ( e.g.

creating a single use of disposable camera );

Redefining the marketplace (e.g. detouring

retailer by selling online at the companys
website); and

Redrawing industry boundaries (e.g. getting

credit cards from shell oil or general motors
or AOL ).

END