Global economic

STRATEGY & STRUCTURE

Conditions for success
1) Internal consistency: operating on efficiency frontier
2) Strategy + Structure = ex. lolipop
3) 1+2 must match external environment

Functional Form

Pyramid vs Pancake

Argument for Centralization
- High Coordination
- Decision are consistence objective
- Internal org change is easier
- Avoid duplication of activity
- Static model/ bureaucratic structure

Argument for Decentralization
- More mgnt time for primary function
- Increase individual freedom/motivation
- Rapid response to env. change
- adapt model/ organic structure
- Decision made close to front line
- Increase in accountability

ch.14 ENTRY STRATEGY & ALLIANCE

I. Where?
Profit = f(Revenue, Cost, size of market, wealth, growth)

II. Timing of entry
1st mover advantage - Brand Equity, Experience efficient, Creation of switching costs
1st mover disadvantage - Pioneering Cost: Failure, Develop the market, Educate consumer,

III. Scale ($ = Risk)
A. Strategic Commitment
Large scale, long term
Signaling to customers
Signaling to competition
B. Small scale: Test market
get Learning, small money & risk,