Match Structure with Strategy

Changes in strategy often require changes in the way an organization is structured, for two major reasons. First, structure largely dictates how objectives and policies will be established. For example, objectives and policies established under a geographic organizational structure are couched in geographic terms. objectives and policies are stated largely in terms of products

Types of Organizational Structure

Structure matters! There are seven basic types of organizational structure: (1) functional, (2) divi­sional by geographic area, (3) divisional by product, (4) divisional by customer, (5) divisional by process, (6) strategic business unit (SBU), and (7) matrix. Companies, like people and armies, strive to be better organized/structured than rivals, because better organization can yield

Dos and Don’ts in Developing organizational Charts

Students analyzing strategic-management cases (and actual corporate executives) oftentimes revise and improve a firm’s organizational structure. This section provides some basic guidelines for this endeavor. There are some basic dos and don’ts in regard to devising or constructing organizational charts, especially for midsize to large firms. First of all, reserve the title CEO for

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Strategic Production/Operations Issues

Production/operations capabilities, limitations, and policies can significantly enhance or inhibit the attainment of objectives. production processes typically constitute more than 70 percent of a firm’s total assets. Thus, a major part of the strategy-implementation process takes place at the production site. Strategic production-related decisions on plant size, plant location, prod­uct design, choice of equipment,

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Strategic Human Resource Issues

Any organization is only as good as its people! Thus, human resource issues can make or break successful strategy implementation. Thus, seven human resource issues are discussed further in this section, as follows: (1) linking performance and pay to strategy, (2) balancing work life with home life, (3) developing a diverse work force, (4)

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MINI-CASE ON HILTON WORLDWIDE HOLDINGS (HLT): IS THE NEW HILTON POLICY WARRANTED?

Headquartered in McLean, Virginia, Hilton Worldwide (and Marriott) on January 1, 2015, implemented a new policy that requires customers to notify the hotel the day before their scheduled arrival to avoid having to pay for the room. This policy reverses a long tradition of allowing customers to cancel their reservation “up to 6pm the

Strategic Marketing Issues

Countless marketing variables affect the success or failure of strategy implementation efforts. Some strategic marketing issues or decisions are as follows: How to make advertisements more interactive to be more effective How to take advantage of Facebook and Twitter conservations about the company and industry To use exclusive dealerships or multiple channels of distribution

Social Media Marketing

Social media marketing has become an important strategic issue. Marketing has evolved to be more about building a two-way relationship with consumers than just informing consumers about a product or service. Marketers increasingly must get customers involved in the company website and solicit suggestions in terms of product development, customer service, and ideas. The

Market Segmentation

Market segmentation and product positioning rank as marketing’s most important contributions to strategic management. Market segmentation can be defined as the subdividing of a market into distinct subsets of customers according to needs and buying habits. For example, eBay recently initiated a new market segmentation strategy to target consumers under 18 years old. “We’re

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Product Positioning and Perceptual Mapping

After markets have been segmented so that the firm can target particular customer groups, the next step is to find out what customers want and expect. This takes analysis and research. A severe mistake is to assume the firm knows what customers want and expect. Countless research studies reveal large differences between how customers

Strategic Finance/Accounting Issues

Several finance/accounting concepts central to strategy implementation are acquiring needed capi­tal, developing projected financial statements, preparing financial budgets, and evaluating the worth of a business. Some examples of decisions that may require finance and accounting policies are: To raise capital with short-term debt, long-term debt, preferred stock, or common stock To lease or buy

EPS/EBIT Analysis: Acquire Needed Capital

When students complete their recommendations page with expected costs summed as part of a case analysis, or in actual practice when a firm decides what strategies to pursue at what cost, it is necessary to address the following questions: Can the company obtain the needed capital via stock or debt? Would common stock, bank

Projected Financial Statements

Projected financial statement analysis is a technique that allows an organization to examine the expected results of strategies being implemented. This analysis can be used to forecast the impact of various implementation decisions (for example, to increase promotion expenditures by 50 percent to support a market-development strategy or to increase research and develop­ment expenditures

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Projected Financial Statement Analysis for D. R. Horton

Because so many strategic management students have limited experience developing projected financial statements, let us apply the steps outlined on the previous pages to the largest American homebuilder company by revenues, D. R. Horton (DRH). The projected statements, developed on January 14, 2014, considered that D.R. Horton would go forward with the following four

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Corporate Valuation

Evaluating the worth of a business is central to strategy implementation because numerous strategies are often implemented by acquiring other firms. In addition, some strategies, such as retrenchment and divestiture, may result in the sale of a division of an organization or of the firm itself. Thus, thousands of transactions occur each year in

IPOs, Cash Management, and Corporate Bonds

1. Go Public With An IPO? Hundreds of companies annually hold initial public offerings (IPOs) to move from being pri­vate to being public. In 2014, the number of firms going public was at its fastest pace in years, as investors bid aggressively for new shares of new companies, paying on average 14.5 times annual

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Strategic Research and Development (R&D) Issues

Research and development (R&D) personnel can play an integral part in strategy implemen­tation. These individuals are generally charged with developing new products and improving old products effectively. R&D persons perform tasks that include transferring complex technol­ogy, adjusting processes to local raw materials, adapting processes to local markets, and altering products to particular tastes and

Strategic Management Information Systems (MIS) Issues

Firms that gather, assimilate, and evaluate external and internal information most effectively are gaining competitive advantages over other firms. Having an effective management information system (MIS) may be the most important factor in differentiating successful from unsuccessful firms. The process of strategic management is facilitated immensely in firms that have an effective information system.

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MINI-CASE ON ALIBABA GROUP HOLDING LTD. (BABA) IS SELLING STOCK OR BONDS BEST TO RAISE CAPITAL?

Headquartered in Hangzhou, China, Alibaba is an Internet-based e-commerce retailer that is twice as large as eBay and Amazon combined. Handling about half of all online transactions in China, Alibaba does in China what PayPal and Amazon do in the United States. Alibaba operates Taobao, a consumer marketplace with millions of small Chinese merchants.

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The Strategy-Evaluation Process, Criteria, and Methods

The strategic-management process results in decisions that can have significant, long-lasting consequences. Erroneous strategic decisions can inflict severe penalties and can be exceedingly difficult, if not impossible, to reverse. Therefore, most strategists agree that strategy evaluation is vital to an organization’s well-being; timely evaluations can alert management to problems or potential problems before a