Management Models Slides. Powered by All rights reserved. Product. Price. Promotion. Customer Service. People.

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1 Management Models Slides Product Promotion Price Customer Service Place People Processes Powered by All rights reserved.

2 Key Words... Break-even Financing Life Cycle Economies of Scale Elasticity Sales Cycles Market Potential Portfolio Matrix Product Model Four P s Push/Pull Strategy Marketing Mix PDCA Cycle SWOT Value Chain Ansoff Matrix BCG Matrix 7-S Model Core Competencies GE Business Screen Nine Cell Industry Risk/Reward Diagram Porter s Five Forces Industry Competition Generic Strategies Geobusiness Model Porter s Diamond Matrix Design PIMS Leavitt s Diamond Belbin s Team Roles Theory X/Y Maslow s Hierarchy Herzberg s Theory Cultural Web Pareto Curve CIM Concept Value Drivers

3 The General Electric Business Screen COMPETITIVE POSITION Strong Average Weak Low INDUSTRY ATTRACITVENESS Medium High

4 Attractiveness/Competitive Position Strategies COMPETITIVE POSITION Strong Average Weak High Grow Seek dominance Maximize investment Evaluate potential for leadership via Segmentation Identify weaknesses Build strengths Specialize Seek niches Consider acquisitions INDUSTRY ATTRACTIVENESS Medium Identify growth segments Invest strongly Maintain position elsewhere Identify growth segments Specialize Invest selectively Specialize Seek niches Consider exit Low Maintain overall position Seek cash flow Invest at maintenance levels Prune lines Minimize investment Position to divest Trust leader s statesmanship Sic on competitor s cash generators Time exit and divest

5 Company Position/Industry Attractiveness Screen Industry attractiveness Low Business unit strengths Medium High HOLD BUILD BUILD HARVEST HOLD BUILD Low Medium High HARVEST HARVEST HOLD

6 A Representative Nine-Cell Industry Attractiveness-Competitive Strength Matrix COMPETITIVE STRENGTHS/BUSINESS POSITION Strong Average Weak High Business F Business A LONG-TERM INDUSTRY ATTRACTIVENESS Medium Business C Business B Low Business E Business D High priority for investment Medium priority for investment Low priority for investment

7 BUSINESS STRENGTH GE / McKinsey Multifactor Portfolio Matrix INDUSTRY ATTRACTIVENESS Invest Invest Manage Selectively for Earnings Invest Manage Selectively for Earnings Harvest or Divest Manage Selectively for Earnings Harvest or Divest Harvest or Divest

8 Market Attractiveness Portfolio Positions and Defensive Strategic Market Plans Very Attractive Protect Protect Protect or Harvest Protect or Focus Protect or Focus Very Unattractive Harvest or Divest Very Weak Harvest or Divest Competitive Advantage Protect or Harvest Very Strong

9 MARKET ATTRACTIVENESS Market Attractiveness Portfolio Classification and Strategies BUSINESS STRENGHT High Strong Hydraulic Pumps Medium Joints Weak Aerospace Fittings Invest / grow Selectivity / earnings Harvest / divest Medium Clutches Fuel Pumps 2.33 Flexible Diaphragms Low Relief Valves (a) Classification

10 RISK The Risk-Reward Diagrams High Low High REWARD (NPV) Low

11 Contrasting Characteristics of Upstream and Downstream Companies Supply stages in a manufaturing industry (supply chain) Raw Primary Product Consumer materials manufacturer Fabricator producer marketer Retail Consumer Supply flow UPSTREAM ORGANIZATIONS Centre of gravity of a manufacturing industry DOWNSTREAM ORGANIZATIONS Contrasting characteristics of upstream and downstream companies Upstream Commodity Standardize Maximize end users Low-cost producers Sales push Line-driven organization Process innovation Capital budget Capital-intensive Technological know-how Supply and trading/manufacturing and engineering Downstream Proprietary Customize Target end users High margins Marketing pull Line/staff Product innovation R & D/advertising budget People-intensive Marketing skills Product development/marketing

12 Porter s Five Forces I Potential Entrants Threat new entrants Suppliers Bargaining power of suppliers Industry competitors Bargaining power of buyers Buyers Rivalry among existing firms Threat of substitute products Substitutes

13 Porter s Five Forces II Firms in other industries offering Substitute Products Suppliers of raw materials, parts, components or other resource inputs RIVALRY AMONG COMPETING SELLERS Buyers Potential New Entrants

14 Forces Driving Industry Competition Potential Entrants Threat of new entrants Suppliers Bargaining power of suppliers Industry competitors Bargaining power of buyers Buyers Rivalry among existing firms Threat of substitute products or services Substitutes

15 Barriers and Profitability EXIT BARRIERS Low High Low PROFITS=LOW RETURNS=STABLE PROFITS=LOW RETURNS=RISKY ENTRY BARRIERS High PROFITS=HIGH RETURNS=STABLE PROFITS=HIGH RETURNS=RISKY

16 Four Routes to Strategic Advantage Business/Product Offered Compete (wisely) Old/Existing KFS New/Creative Aggressive initiatives Route 1 Route 3 Intensify funtional differentiation Ask why-why s Avoid head-on competition Relative superiority Strategic degrees of Freedom Route 2 Route 4 Exploit competitor s weakness Maximize user benefit

17 The Generic Strategies I Differentiation Cost Leadership Focus

18 The Generic Strategies II COMPETITIVE ADVANTAGE Lower Cost Differentiation Broad Target Cost Leadership Differentiation COMPETITIVE SCOPE Narrow Target Cost Focus Differentiation Focus

19 Five Modified Competitive Strategies TYPE OF COMPETITVE ADVANTAGE BEING PURSUED Lower Cost Differentiation A Broad Cross-Section of Buyers Overall Low-Cost Leadership Strategy Broad Differentiation Strategy MARKET TARGET Best-Cost Provider Strategy A Narrow Buyer-Segment (or Market Niche) Focused Low-Cost Strategy Focused Differentiation Strategy

20 Basic Customer service criteria Strategic change involves enhancing the operation s infrastructure Enhanced Sweeney s Generic Strategies Strategic change involves enhancing The operation s structure Marketer Emphasizes Quality Dependability Range Innovator Emphasizes Quality Product/service Performance Speed New product/service Development Caretaker Emphasizes Price/ cost Dependability Quality Innovator Emphasizes Quality Product/service Performance Flexibility Speed Traditional Enhanced