IBMGT Semester 1

Which

• Political
• Economic
• Socio-cultural
• Technological
• Environmental and
• Legal

frameworks influence your products/services development positively or negatively?

• taxation policy
• government stability

• interest and inflation rates
• labour costs

• demographics
• levels of education

• state of infrastructure
• scientific discoveries

• climate change
• energy supplies

• employment law
• business regulations

1. Industry competitors (intensity of rivalry)

• strong competitive rivalry lowers profitability
• occurs when there is overcapacity (e.g. airlines)

2. Potential Entrants (threat of new entrants):

• how easy is it for new companies to enter the market?
• low costs of equipment and facilities make a higher risk of new entrants

3. Buyers (Bargain Power of Buyers/Customers)

• profit decreases with greater power of buyers

4. Suppliers (Bargain Power of Suppliers)

• power of supplier is high and reduces "profit" to buyer

5. Substitutes (threat of substitutes)

• easy to substitute = less profit to supplier

• try to increase entrance barriers through patents, technological standards, economies of scale
• benefit from the fact that the forces contradict/balance each other out
• try to shape the barriers consciously as part of your strategy
• Customer Relationship Management (CRM)
• aiming at cost-leadership or differentiation strategy

Management is comprised of planning, organizing, staffing, leading or directing and controlling an organization for the purpose of accomplishing a goal.

Management measures that address societal challenges and at the same time increase the company success

Strengths

Weaknesses

Opportunities

Threats

• explore possibilities for new efforts or solutions to problems
• determine where change is possible; strengths and weaknesses can reveal priorities as well as possibilities
• adjust and refine plan mid-course
• excellent way to organize information you've gathered from studios or surveys

• Helps to identify opportunities to secure cost advantages
• helps to identify opportunities to create product/service differentiation

• those that are involved in the creation, sales and transfer of products (incl. after-sales-service)
• E.g. Inbound/Outbound Logistics, Operations, Marketing

• Those that merely support the primary activities
• E.g. HR, Technology Development, Procurement

• source of competitive advantage of a firm can be seen from its discrete activities and how they are interacting
• the value chain is a tool for systematically examining the activities of a firm and how they interact with each other and affect each other's cost and performance
• present opportunities for integration
• aligns spending with value processes

• manufacturing based
• service bases
• manufacturing and service based

It gives and outlook on the desired future state of the organization

Valuable

Rare

Costly to Imitate

Organized to be exploited

Each of the 5 P's represents a different approach to strategy

Plan

• Strategy developed in advance and with a purpose e.g. PESTEL, SWOT

Ploy

• Outsmarting competitors: impact and scenario analysis

Pattern

• Learn from the past e.g. USP analysis, core competence analysis

Position

• Position in the marketplace -> competitive advantage analysis, Porter's five forces

Perspective

• Influence of organizational culture on strategic decision making

• Project systems
• Job shop systems
• Batch operations
• Mass production and continuous manufacturing

• very small number of products (low volume)
• long duration to achieve an output
• requires skilled people
• e.g. construction projects such as oil rigs, skyscrapers, bridges

• low volume producing
• special products to customer specification, won't often be repeated
• requires skilled people
• e.g. made-to-measure tailor

• Many different products are produced at regular or irregular intervals, orders are repeated from time to time
• mix of skilled and unskilled people
• e.g. car production with customized equipment

• demand for a single product is high
• automatic production lines with high rates of output
• very low unit cost but also little flexibility
• e.g. printing a newspaper, mobile phones, food products

Process from the initial raw materials to the ultimate consumption of the finished product linking across supplier-user companies.

• personal observation
• oral reports
• written reports
• online information systems

Mechanistic control

• Formal methods such as rules & procedures, top-down authority
• applied in stable, predictable operations

Organic control

• less formal methods with flexible authority
• applied in more uncertain operations

1. Information

2. Interaction

3. Transaction

4. Integration

5. Transformation

Policies and operating practices that enhance a company as well as social conditions in the communities in which it operates.

• Reconceiving products and markets
• Redefining productivity in the value chain
• Enabliing local cluster development

• Be supportive
• Operate with strong results orientation
• Seek different perspectives
• Solve problems effectively

• Responsible for the operational aspects of the business
• Uses resources to secure capabilities and ensure that value is added
• Effective business administration increases the chances of profitable business outcomes and success