Strategic Management 2022/2023

FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES

UNDERGRADUATE PROGRAMME
DEPARTMENT OF MANAGEMENT

Course title: Strategic Management

Course instructor: Dr. Tayong Desmond M./ Dr. Fon Tamandjong

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 Strategic Management 2022/2023

CHAPTER ONE: GENERAL INTRODUCTION

1.1. WHAT IS A STRATEGY?

Strategies are unarguably the most important concept of management studies today. Yet it is a
concept difficult to define and an activity difficult to pursue with certainty. They are many
people involve in the strategic formulation and also many ways of interpreting what a strategy is.

In its simplest formulation, a strategy is regarded as a unifying idea which links purpose and
action. In the words of Alfred chandler, the first modern business strategy theorist, a strategy in
the area of business is defined as the determination of the basic long-term goals and objectives of
an enterprise and the adoption of the various courses of action and the allocation of resources
necessary for the attainment of the goals. Although still tentative and preliminary as a definition,
it is possible to advance a little further and say a strategy is a coordinated series of actions which
involves the deployment of resources to which one has access for the achievement of a given
purpose.

Many other authors have defined a strategy among which we have Kenneth Andrew who defined
a strategy as a set of decisions which determines and reveals the objectives, missions and goals
which produces principal policies and plans for the attainment of these objectives and the domain
of activity to be engaged by the enterprise. Also, also, Alain Desreumaux and Mintzburg defined
a strategy as a set of actions that determines the success of an enterprise in a durable manner.

1.2. The essential elements of a strategy

From its numerous definitions, a strategy is seen as made up of many elements which can be
analyzed as follows:

 The strategic decision always deals with resource allocation;

This is so because economic resources are limited in supply and having alternative uses. This
implies at any point in time, there will either be excesses or shortages and they need to be
efficiently allocated to get the best outcome. The resources here include human, technological,
financial etc.

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 A strategy is for the future

It doesn’t simply focus on the present or evaluating the past. It also involves forecasting the
future evolution of economic events. The time factor is very important because the strategies put
in place today cannot be realized immediately. It is only time that determines the success or
failure of the strategy.

 Flexibility and stability

a strategy tries to achieve a balance between flexibility and stability and so avoid excessive
rigidity or the anarchy of repeated and random changes in direction.

 A strategy is complex

A strategy is formulated for a future which by nature is uncertain and non probabilistic, that is a
complex economic environment. This imples for a strategy to be successful, it has to be complex
in order to incorporate the ever changing nature of the economic environment.

 A strategy is holistic

A strategy recognizes the different inter connection of the different parts that makeup the
organization that is a strategy integrates all the functional business activities such as marketing,
finance, HRM, information systems among other.

 A strategy is interactive

The quality of a strategy reflects the degree to which it takes account of the strategies of other
players (stakeholders) of the organization such as the government, supplies, customers,
professional associations among others.

The objectives of a strategy

 Reaction towards environmental changes

 The search for competitivity
 To be different from other competitor
 To develop and grow

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Assignment

Which organizations make strategies and at which level?

Does the nature of the strategy differ from one level to another?

Who is a strategist?

1.3. levels of strategies

Most scholars classify strategies into three levels: the corporate level, the business (tactical
level) and the functional (operational) level

At the corporate level it seeks to answer the following question: what business are we in or hope
to be? What business the business should be in? It relates to the future formulation and
structuring of the company and affects the evolution of the company and the business in which it
intends to compete.

At the business level, the strategy is about which products or services should be developed and
offered to which market and the extent to which the customer’s needs are met while achieving
the objectives of the organization.

At the operational level, the strategy is to determine how the different functional areas of the
business support the corporate and business strategies. They are concerned with how the various
functions of the organization such as marketing, finance, production among others contribute to
the main goals and objectives of the organization.

Types of strategies

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Explanation

 Planned and deliberate strategies: come about where there are peers intentions which
are written down and imposed by a central leadership. This central leadership is charged
with the review and evaluation of any option available and they are able to choose what
appears to using this criteria’s should;
- Be large enough to afford the cost of formal analysis
- Have goes that are operational
- Operate in an environment that is reasonable predictable and stable
- Have a systematic approach to its development
- Collect internal and external information to be integrated in the strategy.
 Emergent strategy: each strategy is seen as having a foundation in the enterprise. But at
times the evaluation of the environment causes the strategy to be adapted. We talk of
caring out strategy as that which is not formally written down but average over time as
part of the culture of the enterprise.
 Opportunity strategy; there are strategy where come about in an entrepreneur way. An
organization may take advantages of changes in the environment or recognize new skills
in an opportunist manner. Alternatively a firm may be setup by an entrepreneur to take
advantages of an opportunity in the market.
 Imposed strategy: strategy may sometimes be impose on the organization especially
recently privatized and multi-national. A recession and threat of a takeover may source in
a strategy of cost cutting and retrenchment itch; technological development may cause an
organization to develop new products to replace the ones that have become absolek.
 Realized and unrealized strategies: it strategy may be realize and thus be successfully
implemented or it may far and remain unrealized in practice business it is in and the
customer or cheat it seeks to satisfied. A formal mission statement provider a during
force behind the organization other plans and more experience objective. It mission
statement is a formal commitment to the vision that incorporates the company’s strategy.
So a good way to see if an organization has a mission statement and what that says about
it reasons for existing and the direction and strategies put in place for the future.
 Objectives: this is a qualification of possible or move precise statement of the mission
objective do not only represent the and poor of planning business are the ends and toward

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which management activities and resources usage are divided. They therefore provided a
serve direction and a measure of success achievement (Johnson and schools, 2002)
objective is therefore generally seen as the ends that state specifically how the goals shall
be an achieved.

What is a business strategy?

In essence, business strategy is all about CHOICE. This includes the choices that businesses
make about which markets they try to compete in and also how they choose to compete.
Business strategy involves planning, setting goals, determining the most appropriate actions or
tactics in order to achieve these goals and the marshalling of resources in order to execute the
plan. In effect, a strategic plan will clearly set out what the desired outcome is and how it can be
achieved. Put simply, Business strategy is a clear set of plans, actions and goals that outlines how
a business will compete in a particular market, or markets, with a product or number of products
or services.

A business strategy creates a vision and direction for the whole organisation. It is important that
all people within a company have clear goals and are following the direction, or mission of the
organisation. A strategy can provide this vision and prevent individuals from losing sight of their
company's aims.

The main purpose of a business strategy lies in creating a vision for an organization that provides
direction and guidance. All members need to have a clear picture of organizational goals and
objectives to carry out their responsibilities. Business strategies help people stay focused on the
big picture. A good strategy provides a clear roadmap, consisting of a set of guiding principles or
rules, that defines the actions people in the business should take (and not take) and the things
they should prioritize (and not prioritize) to achieve desired goals.

The basic principles are: If you want to earn above the cost of capital (if you want to create
value), you must get a higher return on your efforts than the average competitor. To get a higher
return than the average competitor, you must have an advantage or you must compete in an
unusually attractive sector.

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Several components are involved in developing a comprehensive corporate strategy. The four
most widely accepted key components of corporate strategy are visioning, objective setting,
resource allocation and prioritization.

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CHAPTER TWO: THE STRATEGY PROCESS

Strategy management in the organize developing of the resources of the several areas i.e.
social, management, marketing, technological, man power or in the pursuit of its objectives. The
complex nature of many large organizations has led to the operating of strategy inter-related
levels companies the hierarchy of process as follows;

Mission

Objective

Strategy

Tactics

Actions, programmes and rules

Fig; the hierarchy of process.

Another conception is of a hopper chain

Strategy Deployment of Desired objectives

resources

The process is a set policies adapted by senior management which guide the scope and
direction of the entity. In take into account the environment in which the company operate.

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Mission;

Mission and vision are interchangeable although vision is broader and future looking.
Every organization will have a purpose for its continued gesture. It mission state expresses this
purpose and can therefore be a brief statement. The mission and vision of a organization are
usually summarized in what is known as the mission statement which include information on the
basic function or lack of an organization particularly why at exist the nature of the business it
operates and the customers it seeks to satisfy. A formal mission statement provides a diving for
behind the organizations other plans and more specifically its objectives.

Objectives:

This is a quantitative representation if possible or a more precise representation of the mission.

Objectives do not only represent the end point of planning but are also the ends towards which
management activities and resource usage are directed. They therefore provide a sense of
direction and a measure of the success achievement. Objectives are therefore seen as the ends
that state specifically how the goals shall be achieved.

Objectives are seen as easier than mission or they are closer to the operational level
where actions are realized. For example the objective of reducing absenteeism by 5% by the end
of the year may be seen are the objective of the personal department. Generally objectives have
the following characteristics.

S- Specified (state clearly what to be achieved)

M – Measurable (quatifiable)

A – Achievable (always be achievable)

R – Relevant / relative (targets realities, reasonable, renewable)

T – time-bound (define time given)

Generally the main and most important objective of an organization is seen as the primary
objectives while the sub objectives are seen as secondary. Also an objective is said to be open

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where there is no realization time frame and close when there is a defined time frame achieving
the objective

Strategies:

This return to broad areas of an enterprise operation. Their purpose is to furnish a framework
for more detailed tactical planning and action (as above)

 Tactics:

These are actions carried out to put into effect the details of a strategic decision. A tactic can
therefore be seen as the detailed implementation of a strategy. In addition some tactical decisions
will be made in respond to changing circumstances.

 Actions and programmes and rules;

These are the operational practices that will translate the intention of the tactics into action by
individuals and are therefore detailed, short term and subject to immediate control.

 Goals;

Formulating appropriate goals is a vital component of the strategy process, planning and decision
making. Organizational goals are important because they provide a sense of decision and help to
focus management decision making. They also provide a standard against which progress can be
evaluated.

PROBLEMS OF GOAL IDENTIFICATION

If the concept of organizational goals is carefully examine a number of important theoretical and
practical problems begin to emerge. It will be useful to list these in summary in order to better
understand than;

- Whether organization have goals at all

- Whose goals to take into account
- Whether official and actual goals are the same
- What relationship exist between goals at different levels within the organization

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- How to establish priority amongst goals

Within the organization, individuals too have their goals as a result, identifying the overall
organization goals cannot be simply by adding together every individual’s personal goals. This
leads us to the second problem whose goals to take into consideration?

What senior managers want the organization to achieve and what the people in the
organization actually do are not inevitable the same thing. Goals at different levels of the
organization have to be compared to establish whether actually an overall organization goal
exists.

Identifying the goals of a particular organization certainty requires inputs from those in
charge. In an owner managed business organization, this group is clearly identified. However in
a large plc or public sector organization the identification is much more difficult usually the
process is made easier where there is a formal written statement of the organizational goals.

Formal goals are an essential starting point but they will not necessarily reflect in every
respect the goals that are actually pursued in the everyday management of the organization.
These actual goals may only be discovered by talking to a much wider group of members of the
organization or by participating in the making of key decision.

An environmental analysis of opportunities and threats should include a stakeholder

analysis because profitability and other external measures are evaluated by this powerful group
and in terms of the organization’s goals or mission. The non taking into consideration of the
stakeholder’s analysis may be disastrous for the organization.

The goal model of effectiveness

Although it had its origin in accounting the goals model is unquestionable the most
commonly used and discussed approach of assessing effectiveness (bedian 1984). The external
measure of these goals might include among others profit turnover market share delivery time,
reputation.

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The population of the goals mode is seen in its simplicity although in reality it isn’t that
simple. The main assumption of this model is that the goals of an organization can be clearly
established and that the necessary human and material resources can then be manage to achieve
these objectives. As already analysis above, the identification and prioritization of organizational
goals may be more difficult than is recognized by a simple model. A further complication
concerns the period of time to be taken into consideration when assessing performance using this
approves. Organizations are dynamic entities and a measurement of goals attainment at any one
time may not give a complete picture of organizational performance.

The system resource model

The interdependence between an organization and its environment provides the starting
point for the system resource model of organization effectiveness. When considering a system
approach we say organization depend on being able to acquire input from their environment to
be processed and returned as output to others in the environment who will value them. Such
factors of systems model might include;

- Bargaining expertise
- Bargaining power
- Effectiveness environmental scanning (e.g. predicting the environment )
- Adoptability to change

The internal process model (approach)

This is the most widely used model in not for profit organization such as charities for whom
financial measure are not always appropriate. This model is more incline to the concept of
efficient than effectiveness. However, certain measures can overcome this such as these used by
Peterson and Waterman such as;

- High morals
- Strong culture
- Quick decision making
- Effective reward systems
-

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ENVIRONMENTAL ANALYSIS

Managers responsible for the success of an organization are concern about the effect that
factors in the external environment have upon them. They cannot control the external
environment but they need to identify evaluated react to this focus outside the organization
which may affect them. One of the ways managers attempt to achieve this is by means of a
qualitative assessment of signals they receive which are relative to outside influence. There is
therefore a need to carry out an analysis of these forces from the environment that are likely to
affect the survival of the organization. Thus the study of environmental analysis.

1. Types of environment: to decide on the focus which environmental analysis should take
it is important to consider the nature of an organization environment in terms of it
uncertainty.
a. A simple / state environment; it is the easiest to analyze. In this case a detailed
systematic historical analysis is sufficient to understand the environment.
b. A dynamic environment:

All aspects of the environment are subjected to change. When changes are rapid or sudden such
environments are referred to as turbulent. Frequently a change in one element of the environment
leads to change in the other elements of the environment since they are inter-related.

In these conditions, managers must look to the future not just to the past. A useful model of
achieving this is known as “Scenario building “ in which an attempt is made to construct a view
of the future based on the views of possible development around key factors

c. Complex environment;

There are becomes more and more common now our days. Technology makes policies are
becoming more dynamic. The globalization of organization in the form of multinational forms
and multinational politics structure such as the European Union CEMAC has greatly increased
environmental complicity leading to conditions of great uncertainty.

An analysis of such environment is often focuses on helping to sensitize managers to signals in

their environment and encouraging them to be flexible in their responds to such signals. The

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dynamism and complexity of the environment helps to increase uncertainty. As a result

uncertainty sets limit on the ability to predict accurately the future state of the environment.

2. Interpreting environmental analysis:

In order to interpret the environment, there are 4 major questions which the manager of an
organization has to consider;

- How can we minimize the threat from the environment?

- How can we take maximum advantage of the opportunities which may exist?
- What advantage do we have over our competitors?
- What are our limitations?

Every organization’s environment changes over a period of time. Sometimes this change asks
in favor of the organization. Sometimes, the opposite happens and the organization has to
take steps to avoid being blown off cause i.e. away from its strategy. if changes in the
organization happen suddenly then it is the organization which can best handle change which
are going to survive

The PESTL analysis

We have already seen that an organization does not exist in a vacuum but in an
environment and it interact with the environment in which it operate. In order to understand
the functioning of an organization as it interact with its environment, some key elements
have been identified which taken together make up the total environment There are
political, economic, social, technological and legal elements (PEST).

 Political: Organizations are influence by government policies such as taxation

policies, political orientation, legislative structures, and trade union power and so on
and if not well analysis may significantly affect the organization.
 Economic; Organizations have to operate in condition of boom and recession at
times. The interest rates changes, tax rate changes, the money supply can be attired,
investment levels go up and down as people try to guess the lively future market

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movement etc. In the global economy, and exchange rates have an effect on the
economy and stock markets throughout the world. This affects the ability of firms to
complete with overseas markets.
 Social; the culture of an organization is affected by the culture of the society in which
it operates. Changes in lifestyles affect the market and thus the running of an
organisation. Social mobility, demography, family size can all contribute to affect the
human resources, inputs and markets in which an organization operates
 Technological ; the level and focus of both government and industrial research and
development expenditure have an effect an technological changes in the environment.
The nature of such changes and the speed of technological transfers will have an
inpact on an organizational technology. Product life cycle which seem to get shorter
and shorter particularly in the electronics industry also play an important role in this
area.
 Legal; strategy must reflect and take into account the legal factors existing. There are
hundreds of laws and regulations which may affects strategy plans. These laws and
regulations must be taken into consideration if the organization has to be performant.

THE STAKEHOLDERS APPROACH TO STRATEGY MANAGEMENT

Stakeholders are seen as individuals who has one or many interest in his relation with the
organization and who can consequently have a legitimate claim on the organization. According
to freeman (1984), a stakeholder is an individual or group of individuals who affects or can be
affected by the realization of the organizational objectives. The main stakeholders of an
organization can be analyzing as follows;

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Syndicate civil society

s
Banks
Professional
Association
The enterprise
Shareholders
State

clients Supplies

The criteria for the identification and classification of stakeholders

1. The classification of Mitchell Angle and Wood ( 1997 ) ;

These authors classify stakeholders according to 3 criterion i.e. power, legitimacy and urgency.

 Power; power is deserved as the capacity of individuals to influence others. It is seen as

the capacity of those who have it to provoke desired result. 3 main types of power exist
which are;
- Coercive power; this type of power is based on individual influencing others using their
physical force or strength.
- Utility power; this is the case of individual influence others using their financial and
other resources.
- Normative power; this type of power is base on symbolic resources such as competence,
independence, capacity to analyst etc.
 Legitimacy; according to freeman (1984) legitimate is the capacity of an individual to
exercise a certain influence. This is seen as the capacity of an individual, the DG for
example to be able to negotiate at different levels of the organization.
 Urgency; this is seen sensibility to the time factor i.e. the degree of acceptable delay to
the stakeholders from the managers in their respond to claim in terms of criticisms. It is
generally seen that the more the power of the stakeholders, the more the DG will accord
him more attention and integrate him in the decision making process.

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2. The Donaldson and prestos approach (1995)

Under the model three assumptions are made:
- The shareholder is a description of the enterprise and its relation with its environment
- The stakeholder theory is normative because the stakeholders are individuals having
different interest
- The stakeholder’s theory is managerial as it does not only describe and predict but also
recommend structure and practices.

The main idea behind this theory is that all stakeholders try to make sure their interest is
preserve during decision making. With this in mind, what is the organization mode that can
be put in place and which will bring all the stakeholders on a general objective? Up to now
the best way is seen as consideration the stakeholders in the BOD when the stakeholders
have a general objective.

3. The mode of influence by freeman (1998) ;

According to this author, he envisaged a larger relation with the stakeholder. The organization
classifies stakeholders into sub groups. This implies there is a possibility of coalition between
having the same objectives. With is in mind, what type of coalition will be best to guarantee the
best interest of the enterprise or what can be done to make the stakeholder come together to
defend the general interest of the enterprise

4. The jawahar and McLanglin model (2001)

To these authors, at each stage of the life cycle of an organization, the group of individual who
will be able to satisfy the critical needs of the organization will be more important than others.
Thus the integration of each stakeholder in decision making will depend on their influence at that
particular point in time.

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The stakeholders and social responsibility CSR

Protection of environment

Profit max Environmental

Economic

Life of workers

Moral or ethical
Social

Equality at all levels of the

Organization

With the incorporation of the principle of CSR the manager is not only oriented toward
the attainment of the basic objective (profit maximization) but also has to incorporate others such
as the social environment and ethical objectives. Therefore these four aspects taken into
consideration will lead to a durable development which is also a way of contributing to the
creation of value.

According to the stakeholders theory, the manager is now control by many individuals,
goods and services the market, banks, stakeholders etc. this implies the control placed on the
manager become very effective.

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CHAPTER 3:

ELEMENTS OF THE ENTERPRISE STRATEGY MANAGEMENT.

This is analyzing and choosing the best strategy which will enable the 5 th have the best
advantages over its corporation. These will include;

- Competitive advantage
- Diversification
- The decision of differentiation and flexibility
- Positioning
- Franchising

1. Competitive advantage;

Competitive is a word used daily in the life of an organization when an organization sets its
objective it has been proven that the best way to achieve them is to develop a determinant
competitive advantage over her rivals. Johnson and scholars however pointed out that in order to
achieve competitive advantage it is not suffered to develop a cost leadership strategy based on
proposing the lower cost between. It is also necessary to supply the product or services which the
user sees as having an advantage over its competitors.

The competitive advantage can be defined from the following positions

- Competitive advantage suppose a disparity of resources
- A competitive advantage for an is a disadvantage to another
- Competitive advantage is the result of a strategy in the market economy.

Competitive advantage remain the foundation of the strategy process as it is often said the
success of all enterprise result from a strategy which consist of acquiring competitive advantage
and concerning a particular position in the market with respect to its competitors. The main now
is how an can be develop a advantage her competitor from her strength and weaknesses and the
study of study.

A. The notion of value chain: the search for competitive advantages for a start by an
extractive and target diagnosis of the internal and external environment of the enterprise.

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This diagnosis has to be exhaustive because the enterprise has investigated all the sources
of value. Also the diagnosis has to be targeted because these sources of value will be
recognizing as strategy.
i. The nation of activities chain or business system of the Mc Kinsey Cabinet. They
suggested the fat approach to the value chain analysis using the following diagram.

Technology Conception of Manufactory Marketing of distributi Sale of the

the product of the product the product on product
product

- Technology: during the choice of technology the entrepreneur should focus the use of the
various available technologies which will enable him choose the best in terms of efficient
and cost. This will permit them to have an edge over its competitors.
- Conception of the product; in concerning the product the enterprise has to take into
consideration not just the internals factors of the product but also all the physical
characters such as esthetic, mark, packaging e.t.c.
- Manufacturing of the product (fabrication); at this stage the technology chosen
initially is taken into consideration as well as good quality raw material while taking into
consideration the supplier’s capacity.
- Marketing ; at this level the most considered element are the price, promotion, the sales
force, condition, the mark etc.
- Distribution; the enterprise has to take into consideration the efficiency of its demand
channel which will deform the available of the goods in the market.
- Sales; here the various discount and guarantee have to be deformed and the sales price
fixed. The authority chain laid emphasis on the activities of the enterprise and their
chronological sequence. It aims at deterring or identifying the key activities or critical
activities which could bring value to the enterprise and give them a competitive
advantage over their competitors. The main inconvenience of the activity chain is that it
brings light the strategy activities of the enterprise but does not make allusion to the
transductionactivities such as; HRM, technology. The image of the others. This is why
the value chain of Michael Porter comes to light.

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ii. The value of Michael porter

Firm Infrastructure
HRM
Technology development
Support activities

Supplies Margins

Internal External Marketing

Xo Services
Logistic Logistics and sales

The author distinguishes 2 types of activity contributing to create value ( or control the profit of
an ) i.e. the principal activities and the support activities.

On the one hand the principal activities correspond to the function of the Mc Kensey model
while on the other hand the support activities integrated the transduction factors such as firm
infrastructure. High technology supplies.

NB; the list of retained activities on the diagram in only indicative it has to be adapted to the
framework of each.

The main disadvantage of the value chain is that it does not make allusion to inter-
enterprise relations. It is the set made I up of principal activities (functional) of support activities
(torus functional) and inter – enterprise relations that constitute what is known as the value

System of an

b) The modern form of competitive advantage

i. the practice of low cost: the competitive advantage of an strategy reside in the practice of low
cost. This original in Japan after ww11 when the Yen was devalued and the give a competitive
advantage to Japanese firms

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ii. The reduction of delivery date lives to customers; according to S. shingo (1993)
competitive advantage might be acquired by reducing the delivery dateline to customers. This
advantage is link an effective analysis of the market evaluation. The competitive advantage
which brings the reduction of the dateline to customers has can firm the role to the time factors in
the X chain of a product

iii. The mastery of quality and line; talking about quality we have observed there last year, an
extension of this competitive. We have pass from an institution on the functional quality of
x to a diffusion of the said quality of the activity ( comprising services).

The decision of diversification and differentiation

Actual New
Actual Penetration Development of the
product
New Development of the Diversification
Customers

market

i. Diversification; diversification is the result of strategic movement of the. It involve

them into new products into market such which are new to the company or it may be
that the product new to the company but has already available in the market. The
enterprise is seen as being in a new environment with new ideas new components
among others are combine with new technologies to produce new product for a new
market when a new products is put in place which is not implicating new competence
this is not seen as diversification.
a. Penetration;this strategy applies to selling an existing product in an existing marketing it
is suitable in a growing marketing which is not yet storable penetration of the market can
be achieve by:
- Attracting new customers to the product

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- Increasing the usage or purchasing rare of caring customers.

It is often achieved by increasing activities through more intensive aggressive promotion,
pricing among other.

b. Market development: how the existing product in a new market. This strategy is used
when a regional business work to expand or when new market are opening up or even
when new uses are found for the existing product. It means presenting the product section
of the market or geographical regrets not yet covered by the Cs. To do so implies
repositioning or product and also use of new do channels
c. Product development; it involves developing new product to sell in existing market. At
times it merely involve new packaging, perfume colour etc. it is usually employed with
branded goods which enable the quality of the “new” product to be link to the needs and
confidence of the customer . it also helps in building customers loyalty.

What is the level of control extended at the sub contracted activity?

This depends on the importance of the activity and the cash flow it generates. If the
activity is a support activities have less control will be allocated.

The internal factors in favor of diversification

a. Human pressure; the laxity of cartam in the enterprise in relation to the product may push
the manager to a diversification strategy. This is seen mostly at the maturity and declare
phases of the lifecycle of a product the pressure mostly comes from the customers who may
want an article of the gamme or the arrival of a new product.
b. The result of research can lead to diversification; an enterprise engage in an important
research can discover new method and ideas of innovation and the developing of it
products and service which may lead to diversification.
c. The observation of the structure; an observing the cost structure from above (upstream)
and the realize value added below (downstream) can be tempted to diversify in the form of
vertical integration. This also held for horizontal integration.

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The nation of flexibility strategy

Definition and component of flexibility;

Flexibility is the aptitude to adapt continuously to the less formal able evaluation of the
business environment. This more the evaluative nature of the environment the more difficult it is
to forecast and the more reason why we need the enterprise to be flexible to these changes.
Flexibility is a major source globally used in the business world to that which courses the
product market couple.

1. Flexibility and the market couple;

a. Flexibility and diversification; diversification offer to the various alternate with
regards to the product and market couple. It is important to note that internal
flexibility is very important if one have to attain the global flexibility strategy.
b. Flexibility and innovation product; there exist 2 types of product innovation
- Product innovation motivated by demand
- Product innovated by technology

Innovation motivation by demand or minor innovation is base on a simple modification of

the existing product and probable the innovation of the number of customers. This type of
innovation is the most successful.

Pushed or major innovation or radical innovation can be provoking a delay in the product
lifecycle and lead to very serious adjustments. This type of innovation is a key factor to the
offering of the in the long run.

2. Flexibility advantages derived from minor innovation;

i. It favours the participation of a great number of. this type of flexibility concerns
anyone and that is why it is easily applied to all
ii. Flexibility resulting from minor innovation permits to assure the opera efficiency
of the activities of the enterprise. According to Charles Lamantia, PDG of HDL
consulting cabinet “contributingto the industry process is now profitable than
realizing great discoveries”. This implies minor innovators contribute more than
major innovation.

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iii. Flexibility and investment; one of the principal draw books to flexibility in the
nature of investment put in place. Taking into account new risk such as
uncertainty in the level of competition, technological changes, sociability
becomes very important. The amelioration of the efficiency of a depends on the
anticipation of the decision makes as to the evaluation of uncertainty factors
which affect their activities.
The second aspect of this relationship lies with the choice of the investment the
innovation project must be profitable, having regular cash in factors will cover up
the invested cost within the detective.
iv. Flexibility and methods of production and marketing; it is possible to put in
place xo and marketing system adapted to the evaluation of the environment. This
can result to delocalization and sub contracting. There are some base questions to
ensure before opting for the strategy of sub contracting.

Question: what should be the relationship between my company and the sub contractors?

The answer on the owe land takes into account in the owe hand, the financial capacity of the
enterprise and the other hand, the strength and the evaluation of the sub contractor and his
expense in relation the allocated jobs.

Question: what is the lifespan of the activities?

If the divination is brief then the sub contractors strategy is used on the other hand, if the division
is long , it is letter to integrate the activities into the normal activities of the.

Positioning

Positioning is the act of acquiring a particular position in terms of your product in the
heart of the customers. The greater danger which challenges all cs today is that of “Anonymity”
coming out from this anonminity is the challenge of all Cs. To be able to succeed the Cs has to
occupy a position in the heart of the customers using a well communication means.

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A great number of Cs search in a permanent manner a freedom of action especially in the

domain of production and price fixing the evaluation of the struggle can be seen as follows;

i. The 5os and the product priority: in the sos the strategy undertaken by cs marked
by the putting into the market a great number of newly produce product on the basis
of existing technology after the WW11. The publicity communication related to the
products is scalable and simper red by the seal that the product are new to the position
in relation to competition. The Cs makes reference to the material differentiation of
the products.
ii. The 6o and the differation by the image of the mark; at the and g the 50s the
differentiation by product rapidly gave way because of the introduction of new
technology. other cs had easy access to new technology cs seek to put in place a mark
or new with the objective to occupy a portion of the consumers conscience when this
differation become global the approach had to change.
iii. The 7os and the era of positioning; positioning originated from the following idea
“there is a place in the mind of the consumers for a limited number of position or
products”. The mark is this level to be global easily memorized and giving a large
term position. The cs has them an interest to defend their position by creating strong
marks which are related to the characteristics of the products.

Positioning in practice

The positioning of a product is translated in the mind of the consumers as a result of

segmentation – differation strategy. A will formulated segmentation – differentiation strategy
will not succeed without a well established position. The segmentation – differation strategy is
obviously very important but there is need to associate the positioning decision.

i. Positioning by the characteristics of the cs; this is the most global form of positioning.
This is mostly seen in terms of the size and the image of the cs. Profits example of
positioning by size is the 1B cs (international business machine) in the domain of micro
processing 1BM can manipulate prices because according to them their size at as a position
in the minds of the customers.

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Also a perfect example of positioning by image is by the MEACENES Cs who have succeed in
imposing in the minds of the consumers theory product is sure ( certain ).

ii. Positioning by the characteristics of the product; the attribute which credit in the mind
of the consumers an idea of quality and practice. But the price can be a cause and a
consequence of positioning when it is adapted to the value of the product. It becomes
useless when no policies are put in place to impose the product and its price in the minds of
the customers. The conditioning (way of packaging) can be a key to positioning also after
sale services among others can be considered.

Differentiation

Differentiation enables the form to be able to distinguish its products from those of its rivals. The
differentiation strategy is based on:

- Providing products/services unique or different from those of competitors

- Providing customers with products / services that are perceived to have a higher value
than those of competitor
- Increasing the buyers satisfaction

Advantages

- The product/services will command a higher price

- The demand for the product/services will be less elative
- Super normal profiles can be attained
- It creates a barrier to entry to new business wishing to enter the industry.

How to achieve diffentiation

- Create product/services superior to competitors (e.g. design, performance, reliability etc).

- Offer superior after sales services
- Creates superior supply chain
- Offer superior product/services packaging

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