Strategic Management

Workshop
Integra Development
Program
Mini MBA PT CNA

M. Yorga Permana, MSc.

yorga.permana@sbm-itb.ac.id

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Key Takeaway in SM 1st Session
Course lecturer

M. Yorga Permana

Lecturer at SBM ITB

Center for Innovation Entrepreneurship and Leadership
Master of Science in Innovation Sciences TU Eindhoven,
Netherlands
Outline

 Refresh!
 External Analysis: Porter 5 Forces Model
 Internal Analysis: Porter Value Chain Analysis & VRIO
 Define our Position: Corporate Directional Strategy
 Workshop
 Presentation
Strategic Management Model
 Strategic Management –
Strategic Management
Transformation Approach
Rencana Jangka STRATEGIC
Strategic Management OBJECTIVES
Panjang Perusahaan
History
Extrapolation Interpolation
Old Paradigms
Projection
Industrial Economy GAP
Continuous Improvement
STRATEGIC
INITIATIVES BAU

Future Vision
New Paradigms
Knowledge Economy
Innovation and Breakthrough

2010 2018 (20XX) 2010 2018 (20XX)

THE ROAD STOPS HERE

(John Welly, SBM ITB)
Strategic Management

Inputs Design Components (Processing) Outputs

General

Organization
Effectiveness
Environment

Industry
Structure

Strength &
Weakness

(John Welly, SBM ITB)

Strategy Approach
Resources Based
Company Environment

Integrated Based
Resources Market
(Internal) External

Market Based
5 Forces Model Porter:
Eksternal Organisasi: https://www.youtube.com/watch?v=OCnlArFuU-E
?
Seberapa Atraktif Industri kita
5 Forces Model Porter:
Eksternal Organisasi:

Seberapa Atraktif Industri kita?

Potential of
NEW ENTRANTS
High/Low? Why

Bargaining RIVALRY among Bargaining

Power of COMPETITORS Power of
SUPPLIERS BUYERS
High/Low? Why
High/Low? Why
High/Low? Why

Threat of
SUBSTITUES
High/Low? Why
Porter’s Generic Internal Value Chain
Internal Organisasi:

Seberapa Kuat Organisasi kita?

• Primary Activities Primary activities Support activities
• Inbound Logistics
• Production FIRM INFRASTRUCTURE M
• Warehousing & Distribution A
• Sales & Marketing HUMAN RESOURCE MANAGEMENT R
• Dealer Support & Customer Service TECHNOLOGY DEVELOPMENT
G
I
• Support Activities
• Procurement PROCUREMENT N
• Infrastructure M
• Technology: R&D A
• Human Resource Management INBOUND OUTBOUND MARKETING SERVICE
OPERATIONS LOGISTICS AND SALES R
LOGISTICS
G
A company’s value chain identifies the I
primary activities that create N
customer value and the related
support activities—and also reflects Porter, M. E., (1985), Competitive Advantage, New York: Free Press
the major componnets of its cost
structure. Are the company’s prices and costs competitive?

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 The VRIO Framework:
Internal Organisasi:
Seberapa Kompetitif Organisasi kita ?
Costly to Exploited by Competitive Economic
Valuable? Rare? Imitate? Organization? Implications Implications

No No Disadvantage Below
Normal

Yes No Parity Normal

Temporary Above
Yes Yes No Advantage Normal

Sustained Above
Yes Yes Yes Yes Normal
Advantage
Analisis SWOT

SWOT adalah ringkasan dari Internal

• Strengths Internal Factor Organisasi
Analysis e.g. Gunakan
• Weaknesses VRIO Framework + Value Chain

• Opportunities Lingkungan
strategis
• Threats External Factor (Lingstra/External)
Analysis e.g. Gunakan
Five Forces Porter
Corporate Directional Strategy MATRIX
EFAS Score
Strong Average Weak

A B C
GROWTH GROWTH RETRENCHMENT High
(Vertical (Horizontal (Turn around)
integration) integration)
3

D E F
Medium
STABILITY RETRENCHMENT
STABILITY
(Hold) (Divestment)
(Hold)

2
G H I
GROWTH GROWTH RETRENCHMENT Low
(Concentric (Conglomerate (Liquidation)
Diversification) Diversification)
1

4 3 2 1
IFAS Score
 DIRECTIONAL STRATEGY MATRIX: A

Growth
Concentration
•Vertical Growth
•Horizontal Growth
Diversification
• Concentric
• Conglomerate
Concentration Strategies:
Vertical Growth – taking over the function previously
provided by a supplier or by a distributor.
Vertical Integration – the degree to which a firm operates
vertically in multiple locations on an industry’s value chain
from extracting raw materials to manufacturing to retailing
• Backward integration – assuming a function
previously provided by a supplier.
• Forward integration – assuming a function previously
provided by a distributor.
DIRECTIONAL STRATEGY MATRIX: B

Growth
Concentration
•Vertical Growth
•Horizontal Growth
Diversification
• Concentric
• Conglomerate
Concentration Strategies:
Horizontal Growth - expansion of operations into other geographic
locations and/or increasing the range of products and services offered to
current markets.
Horizontal growth is achieved through:
• Internal development
• Acquisitions
• Strategic alliances

Horizontal integration- the degree to which a firm operates in

multiple geographic locations at the same point on an
industry’s value chain
DIRECTIONAL STRATEGY MATRIX: : G & H

Growth
Concentration
•Vertical Growth
•Horizontal Growth
Diversification
• Concentric
• Conglomerate
Diversification Strategies:
Concentric (Related) Diversification – growth into a related
industry when a firm has a strong competitive position but attractiveness
is low.
Synergy – when two business will generate more profits together
than they could separately.

Conglomerate (Unrelated) Diversification – growth into a

related industry. Management realizes that the current industry is
unattractive. Firm lacks outstanding abilities or skills that it could easily
transfer to related products or services in other industries
DIRECTIONAL STRATEGY MATRIX: D

HOLD
Stability Strategies: • Pause/Proceed with
Caution
continuing activities without any • No Change
significant change in direction. • Profit

Pause/Proceed with caution strategy – an opportunity to

rest before continuing a growth or retrenchment
strategy.

No change strategy – continuance of current operations and

policies.

Profit Strategies – to do nothing new in a worsening

situation but instead to act as though the company’s
problems are only temporary.
 DIRECTIONAL STRATEGY MATRIX: C F I

Retrechment Strategies: Retrenchment

• Turnaround
Used when the firm has a weak • Captive Company
competitive position in some or all of its • Sell-out/Divestment
product lines from poor performance • Bankruptcy/Liquidati
on

Turnaround strategy – emphasizes the improvement of operational efficiency

when the corporation’s problems are pervasive but not critical.
Captive Company Strategy – company gives up independence in exchange
for security.
Sell-out strategy – management can still obtain a good price for its
shareholders and the employees can keep their jobs by selling the
company to another firm.
Divestment – sale of a division with low growth potential
Bankruptcy – company gives up management of the firm to the courts in
return for some settlement of the corporation’s obligations.
Liquidation – management terminates the firm.
 Exploring your Position
First . . .
Select a group leader.
Then . . .
1. Choose the Business Unit
2. Conduct External Analysis (Porter 5 Forces Model)
3. Conduct Internal Analysis (Porter Value Chain)
4. Define Your Position Based on Directional Strategy
Matrix
5. See the Direction of the Business Unit
Group Presentation & Discussion
Debriefing
Feedback

bit.ly/integra_sm

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