Management and Marketing Department

Ministry of Education


XXX University of Moldova

Management and Marketing Department























Theme sentence from strategic management

"Creating and maintaining competitive advantage through offensive strategy"













































Performed by student

XX group

Xxxxxx xxxxxx

Scientific Coordinator:

Xxxxxx xxxxxxxxx

































Chisinau 2007

Contents:



Introduction

The concept of strategy ............................................... .............................................. 3



Chapter I.

1.1 Strategy Components ............................................... ..................................... 4

1.2 Types of strategies ............................................... .......................................... 6

1.3 Definition of strategic management .............................................. .................... 10

1.4 Strategic Management Process .............................................. ..................... 12

1.5 Advantages of strategic management ............................................. ................ 13

1.6 Limits of strategic management ............................................. .................... 13



Chapter II

2.1 Business Strategies .............................................. ............................................. 14

2.1.1 Types of strategies in the strategic business units ...... 14

2.1.2 Functional R & D strategies ...................... 16

2.2 Implementation Strategy ............................................... .............................................. 18

2.3 Appropriate strategies of various industries and competitive situations ................................ 20

2.4 Creating and sustaining competitive advantages ............................................ ....... 22

2.4.1 Creating and sustaining competitive advantage in offensive strategy ... 22



Bibliography ................................................. .................................................. ............. 26























































Introduction

The concept of strategy



Word "strategy" has a history of millennia. Used first to define the "art of war" in ancient China, in about 2500 years ago by Sun-tzu, the time it was not foreign or ancient historian Thucydides and Xenophon, or Caesar Roman Emperor. Moreover, in ancient Greek, the term is still used on the role

an army commander. The exception was the "century of Pericles", about 400-500 Î.H, when time was given and the meaning of leadership and administrative ability, power and persuasion through rhetoric. A century later, when Alexander the Great (c. 330-300 BC), deployment strategy refers to the ability to overwhelm enemy forces and to create a unitary system of government in the huge, but its ephemeral empire.

The literature contains a large number of data interpretation strategy period, there is no universal definition so far, widely accepted. Next, we present some of the most representative definition.

A. Chandler (1962) defines strategy as "determining the long-term goals and objectives of an enterprise adoption of course of action and resources needed to achieve objectives."

I. Ansoff (1965) deals with the strategy as "the common axis of action organizations and products / markets that define the essential nature of economic activities which the organization has done or plans to do so in the future." In his view, the strategy includes four components: geographical growth vector based on the couple product / market, which specify the orientation and size of the firm's future activities;

• competitive advantage, which refers to gaining a stronger competitive position by identifying the properties of each couple product / market;

• Company resource synergy;

• Strategic flexibility, resource-based and transferable skills from one activity to another area.

K. Andrews (1971) considers strategy as "system goals and objectives, policies and plans for achieving these objectives, expressed in a manner that contributes to defining the industry the company is or who agrees to between that and the kind of company that wants to become. "

Mintzberg H. (1987) considers that the strategy can not be reduced to a mere definition, that offers to the concept in five ways, in a complex manner:

1. Strategy as plan by designating a predetermined course of action, a guideline or a set of guidelines to resolve a situation. Thus defined, the strategy has two characteristics:

- Precede the situation to which it applies;

- Is developed consciously and with a purpose.

2. Strategy as tactical maneuvering intentions dejucării applied to competitors or opponents;

3. Strategy as a model, which sets out a series of behavioral action plan because the strategy of the actions of people and their intentions;

4. Strategy as position, which specifies how to identify the place that it occupies in its environment organization, most often on the market. By this definition, strategy becomes a force of mediation between internal and external context of the organization.

5. Strategy as perspective, involving not only a market position but also its own way of perceiving the external environment. This latter definition suggests that, above all, the strategy remains a concept, an abstract representation.

Nicolescu, O. (1999) considers that the strategy can be defined as "all major objectives of the organization long term, the main ways of achieving with the resources allocated to achieve competitive advantage under the mission organization.

There are other definitions presented by different groups of authors on whom I will not stop here, they designed a different study, which does not keep a competitive advantage in strategic management.



Chapter I



1.1 Strategy Components



R. Daft believes that the strategy has four components: purpose, resources, skills characteristic (distinctive) and synergy. Order refers to the number and specific company business, products and services that define the area where the organization falls in line with the environment.

Resource allocation refers to the resources and organization model used to distribute resources to meet strategic objectives. You can set and source of resources.

Powers refers to the distinctive position that a company develops over its competitors through its decisions on resource allocation or purpose.

Synergy defines the conditions that exist when components of the organization interact, producing a greater effect than that obtained by the action of separate parties.

Organization's mission are six components: philosophy, external image, autodefinirea, field action, technology, how to survive in conditions of competition.



O. Nicolescu details such strategy components:

A company's mission (vocation, "credo", book), the starting point in strategy represents a set of principles that guide its work, the general expression of its reason to exist, giving the direction of development of the organization in consistent with reasonable expectations of "stakeholder. Addressed as a product of cooperation / collaboration such, it aims to ensure consensus regarding the objectives set in the context of designing appropriate policies and promote the use of resources. Mission generating company image, goals, intentions, fundamental aspirations for a great time horizon.

B. The strategy objectives in quantitative terms is an expression of the desired future state organization. These, together with the value system and mission management company define a set of core values and relatively durable autoconstrângeri stating the basic philosophy of the company and the basic reference to its choice of objectives and actions.

C. The strategic options to increase vector called Company, are those courses of action that can address a company in order to achieve strategic objectives, with implications for all company activities or relevant parts thereof.

Among the most frequently used policy options note: the diversification of production, specialization in production, entering new markets, acquiring new products. If large companies and large state-owned or in the public and have worked in a centralized economy, saying that they must adapt to market economy requirements, and great importance should be assigned

restructuring and privatization.

D resources is another defining element of the strategy. In formulating the strategy must take into account the resources available to the organization (its resources) or they may have (resources attracted loan resources).

Existing resources to be achieved must be broken down by specific strategy to ensure "diversity" required (human resources, information, material, financial).

Resources appear as fund assets, useful in carrying out current business and investment funds necessary operational policy options chosen. It is important that correct sizing of economic resources and determining their origin - own resources or borrowed to breed - if the c-re some categories are of limited resources and raw materials suppliers, banks, investors, as stakeholders can have a major influence on

operational strategy chosen.

E. Time Strategy appear under different forms (initial term, intermediate deadlines, deadlines). In most approaches, the time appears as a separate component of the strategy, being associated with other components. Knowing the time of release and completion of strategic options, their respect or even shorten the length of operationalization are conditions for success in implementing the chosen strategy.

F. competitive advantage. By formulating the overall strategy must be carefully weighed the consequences that their competitiveness is to support business skill to determine and sustain competitive advantage.

The competitive advantage means "achievement by a firm of superior products or services from a consumer standpoint significantly compared with similar supply of most competitors.

To understand the nature of competitive advantage should be a multidisciplinary approach, because all business functions play an important role in achieving it. Four variables can be considered for this:

market entry barriers;

concentration;

Competitive diversity (number, structure);

purchasing power.







1.2 Types of strategies



Literature dealing with strategies in the organization according to several criteria.

1. In light of developments proposed by company management may be defined:

• Development Strategy, which aims to maximize turnover by increasing production and achieving a competitive cost advantage.

Companies are moving towards adopting such a strategy are companies that have above average profit rate in field work and have a strong innovative potential.

These companies are not restricted to adapt their products and services to the market, but trying to create demand for the products they manufacture and anticipate consumer demands.

Development strategies can be applied by:

- Conquest of new markets, increase market share is not difficult conditions in developing markets, allowing an increase in absolute level of sales. Located in a mature market, competitors develop a low market share is low cost structure disadvantaged firms are leading the market and a declining market, a market penetration depends on the number of firms leaving the market;

- Developing new products, being an expensive alternative, risky and potentially unprofitable, companies have recently opted for technology transfer or for different forms of collaboration in the implementation of new products.



• Strategies neutral stability are called strategies adopted by large firms, which assumes a degree of risk in a stable environment. Because environmental changes are predictable, the company aims to stabilize performance through quality improvements in functional level.

The neutral strategies can be distinguished:

Profit Strategies, which seeks short-term profit by reducing costs related to those investments, marketing, research and development or maintenance of machinery and equipment.

Consolidation strategies, which seek to preserve the positions obtained after completion, usually of high investment efforts. Viewed in conjunction with the nature of the market that works, they may be:

- Building on a growing market, the company aims to maintain market share by developing its activities in parallel with the pace of market development;

- Building a market at its maturity, maintaining market share is difficult and expensive, the company defends its position by taking measures of quality products and services through enhanced marketing activities, improved cost structure, increasing productivity or through investment. All these measures may ultimately result in barriers to entry to the field of activity;

- Building on a declining market. In this case the company decides temporary or permanent reduction of production capacities, are opting for so-called strategy of "collecting the fruits of" trying to obtain maximum profit from the position

was, by licensing the use of available technologies or distribution rights, the leasing of equipment etc..

Recovery Strategy, which is characterized by finding solutions to improve the economic and financial performance of the company to return to a level higher than that of the previous goals. Refers to measures implemented to reduce investment, reduce certain categories of expenditure or sale of assets.

• Strategies for restriction, which are usually associated with failure of strategies adopted earlier. Are characteristic of products, technologies or areas of activity are in decline. Restriction strategies may have two choices:

- Partial liquidation strategies, which applies to products or business consists of selling them inefficient or abandoned.

- Total liquidation strategies, which consist of selling all company assets and is a last resort for when all other options have proven viable.

2. Depending on the diversity of business activities and the existence of links between these activities, there are strategies "portfolio" which can be classified into the following categories:

• Strategies for specialization, which are characteristic of those companies that are moving into producing a single product or range of goods or their sale to a single market. These strategies are based, as strategic choice, specialization.

Horizontal Integration is a form of concentration and is seized by a firm competing or complementary activities of its object of activity, through acquisitions or mergers, in order to enhance its competitive position.

• Strategies for diversification, they relate mainly to two types of diversification:

- Concentric diversification or related fields.

- Conglomerate diversification or unrelated fields.

Concentric diversification is adding to the existing business portfolio of similar businesses in terms of products, technologies, distribution channels. A strong argument for this type of diversification is to achieve a high synergy effect, particularly financially, by targeting a surplus generated positive cash flow of business to another with high requirements.

A variant of concentric diversification is the vertical integration allows a company takeover by a chain link upstream production (ensuring process inputs) and / or downstream (to ensure the process outputs).

Conglomerate diversification by a firm involves the development of business / products not directly related to the activity initially. Linking business is financial, plus joint management within the organization.

While these strategies involve difficulties in the company's internal resources, they are still advantageous in minimizing the risk of investment in a single business.

3. Depending on the source of resources and skills in producing new products, there are ways creştere18 strategies, which are classified as:

• Internal growth strategies - is to increase the volume of assets of a company using its own resources. It is a strategy used primarily in Japan, due to difficulties in penetrating the Japanese market to foreign companies. Characteristic of small firms and public services in the development stage the industry, this strategy runs the risk of a long period of time to achieve the objectives and therefore correlation with market requirements.

• acquisition strategies - buy-it represents a company by another, characterized by loss of acquired firm as independent legal entities, it became merely a division or strategic business area. Acquisitions aimed at developing new products or entering new markets.

• Strategies for merger - means an agreement between two or more companies is completed by merging them into one organization. Often wearing a friendly way, advantages related mergers increase market share, complementary products, services or achieve economies of scale. Difficulties created by acquisitions / mergers are generated by harmonizing organizational culture - part of this process.

4. After the scope, strategies are:

• the global:

- Relate directly to all company activities;

- Is characterized by high complexity and involve considerable resources;

- Is reflected in plans or programs to the whole company.

• part that:

- Refers to some business activities;

- Is characterized by a priority focus on best business or defective components, using relatively limited resources;

- Are reflected usually in programs or plans areas;

- Be approved in the participatory management or the company's senior management executive (general manager).

5. After their participation in business strategy are different strategies:

• integrated, they:

- Be developed by business managers with representatives suprasistemelor of which it forms part;

- Lies in the foreground with the correlation of business activities suprasistemelor objectives of which it forms part;

- Specific to state enterprises, especially in communist economies, supracentralizate;

- Use and level of autonomous and autonomous subsidiaries of major international or national companies.

• independent, that:

- Be developed independently by the company's senior management;

- Maximizing profits fall in the forefront of the establishment or survival - is specific to private companies.

6. After the main objectives incorporated dynamics, strategies are:

• Recovery to:

- Quantitative targets to those made several years ago, top goals from the previous period;

- Focuses on eliminating deficiencies in the recent past.

• consolidation, that:

- Quantitative targets identical or similar to those of the previous period;

- Focuses on improving the quality sides of business.

• Development that:

- Quantitative and qualitative targets significantly higher than in the previous period;

- Is based on a solid economic situation, coupled with considerable technical and commercial potential.

7. After such objectives and nature of approaches, particularly strategies:

• privatization, which:

- Are considering moving from state-owned assets owned by one or more individuals or private companies;

- Is based on the laws on the privatization and the vision of managers and professionals on how to privatize the company.

• restructuring that:

- Focuses on the reorientation and / or resizing all or part of company activities to ensure survival and profitability of its premises;

- Essentially involves changes in the production and management, often difficult and supported by staff.

• Managers who:

- Background is reshaping structural and functional characteristics (decisional, informational, organizational, methodological, managerial) business management system;

- Involves a very laborious redesign management and competent management team and firm action.

• joint venture, which:

- Refers to the combination of a permanent foreign partner, which is co-owner;

- Is seeking competitive advantage through acquisition of additional resources, implementation of new products and services, access to new markets.

• innovation, that:

- Focuses on promoting ştiinţificotehnic rapid progress in the form of new and upgraded products, improved technologies, new systems of organization, etc..;

- Is based on a high potential for research development and production.

• offensive, that:

- Located on the first plane entering new markets and improve their positions on current markets;

- Is based on a high commercial potential for production and financial.

• specialization, that:

- Focuses on restricting the range of products manufactured;

- Is based on highly competitive products and strong technical design sector.

• diversification:

- Focuses on broadening the range of products manufactured;

- Is based on a number of well trained professionals in various fields and organizational potential appreciably.

• organization that:

- Is based on a number of well trained professionals in various fields and an appreciable organizational potential;

- Focuses on improving business organization, regarded as the main lever to increase competitiveness;

- Is based on a high potential organization, known and used by company management.

• Information which:

- Focuses on the redesign of the company information system under heavy calling the modern technique of calculation;

- Is based on investing considerable sums in automation systems, on building a powerful computer system.

8. After the nature of vision and objectives embedded media are different strategies:

• economic, that:

- Is based predominantly on the study and consideration of market requirements and objectives and are the principal means to achieve the expected economic and determined based on economic criteria.

• administrative and economic, in which:

- A role in determining their foreign policy makers have him company, who require certain objectives, strategic options etc.. or restrictions for them.

- Market demands have a role in determining content;

- Some of the objectives and evaluation criteria involved are not economic;

They are used only in state companies, usually those in countries with centrally planned economy.



1.3 Definition of strategic management



Strategic management is one means of modern management, focusing on changes and amendments to be made within the organization and its interactions with the environment in which they operate, to avoid situations in which goods and services offered by the organization, production and sale , entire activity to become obsolete in chronic mismatch compared with the changes.

Strategic management and made into "official" world specialists in management in 1973, when the first international conference on organized by I. Ansoff strategic management at Vanderbilt University, he having a precise meaning universally accepted. As a source of business development, strategic management is based on the definition of I. Ansoff 1:01 enrichment concept of strategic planning in several respects. Strategic management is no longer present

as an overlay strategy formation process management system existing in the company, but a particularly its management, aimed at ensuring articulation links between global strategy and operational policies.

Strategic management includes also decisions related activities such as planning, including setting goals and objectives and timing of their implementation. Strategic management is the process used in modern businesses to help managers to answer questions "strategic", such as: Where is the organization? Where to turn? What are the environmental changes and rhythms

surrounding the firm and the rate occur? What course of action may help the company in achieving its objectives and goals? From this perspective, today's decision-making complexity and sophistication of modern organizations requires the existence of strategic management. In fact, many management and various internal work is part of modern management responsibility. Firm's external environment requires a different set of factors cause: it is immediate external environment consists of competitors, suppliers, customers, whose preferences have unexplained

anticipated or government agencies that monitor compliance. When creating the climate that exists and develops business and external environment helps overcome: it contains the economic, socio-cultural, technical and technological, political priorities, environmental and legislative, each of which must be anticipated, monitored and incorporated into decisions senior management. These influences are subordinated to the major considerations that arise in decision making, ie the multiple objectives of stakeholders involved in business: owners, shareholders, management, employees, bankers, unions, administrations.

Taking account of those interests affect the company's ability to profitably develop and design optimal strategic management process to allow proper positioning of the company in the competitive environment. Theoretically, any position is possible because of strategic management processes enable accurate prediction of environmental changes and preparation for studying responses to unexpected or competing claims.

Significant development of strategic management processes started in the '70s, in the form of long-term planning, "Planning, Programming, Budgeting", "business policy", has increased due to the influence of external environment and internal environment in formulating and implementing strategies and plans. This approach is now

known as strategic management and requires special attention in nine areas:

1. establish business mission, including a statement of goals and philosophy of the organization;

2. developing a company image that reflects the internal conditions of them;

3. external environmental assessment firm, meaning knowledge of the contextual factors and competitive;

4. analysis of possible options of comparing results with requirements of the external environment company profile;

5. a set of long-term objectives and overall strategy formulation, both of which are necessary to achieve goals;

6. identify policy options considered in the performance of the company;

7. formulating short-term goals derived from the overall strategy and long-term objectives;

8. implement strategic decisions based on available resources and the increased correlation, employee tasks, structures, technologies, systems of reasoning;

9. review and evaluate the success of the strategy to serve as a basis for control and as a basis for future policy options and decisions.



Of these nine areas of interest, strategic management takes planning, guiding, directing, organizing, control of strategic decisions and strategic arrangements for action. A business strategy reflects its skills on how to be competitive, with whom to compete, where, when, how and why.

Strategic management lies therefore in a vast field of concerns that the company is considered the environment as a whole holistic, comprehensive and open. As a global entity within the company, a unit can not be privileged over others, and open it as an entity is composed of technical sub-economic, organizational, social, highly interdependent. As a holistic entity, thanks to these

interdependence, the organization becomes "more" than the algebraic sum of its components such as organizational.

Business components, are constantly interacting with various environments (socio-cultural, economic, political, legal, technical, technological, legislative, environmental management).



1.4 Strategic Management Process



Strategic management process defines the set of decisions and actions resulted in the foundation and implementation of plans and programs designed to achieve overall organizational objectives. Organization's goals is necessary that while fully and environmental influences on this process exogenous and endogenous.

Located in obvious correlation with overall business strategy, strategic management refers to the process by which managers establish long-term trend direction of the organization, set specific performance targets, develop strategies to ensure those objectives - taking into account various national circumstances and external - and take decisions and implementing the plan of action chosen.

Strategic management process generates consistent with practice, more important implications of which we note the following:

• sequence the process of formulating and implementing strategy. Thus, the process begins with the development and re-mission business, this step is essentially associated with the development organization and external environment assessment. Naturally, the following: selection and strategy, defining the fundamental objectives and other categories of objectives, design functional strategies to general policies and partial implementation of the strategy and policies, monitoring and evaluation.

• obtain at any time of conducting the strategic management process, appropriate intermediate deadlines established the necessary feedback, but especially after the implementation and evaluation strategy. Therefore, this response management organization can provide accurate knowledge of results

obtained after implementation of the strategy. These are initial data for the preparation of future decisions. Managers are able also to measure and analyze the impact of the strategy to cope more easily any changes necessary to make the company mission.

• Consider the strategic management process as a dynamic process. In this way, must be accepted that all components of strategic management process evolves and becomes permanent. In practice the economic and social change organizations is ongoing and dynamic process planning

strategy should be constantly monitored for notification of significant changes in terms of its components, as an element of caution over the possible implementation of an inappropriate strategy.

Target strategic management process is strategy formulation and implementation, which ends the mission of achieving long term business, the objectives formulated.



1.5 Advantages of strategic management



Strategic management approaches highlights the interactions of managers at all levels of organizational structure in terms of rationale, development, implementation and evaluation strategy. Economic benefits are pursued through the practice of strategic management priority. We highlight below:

• Ensure tabilităţii profits as its main purpose of the organization. Businesses are creating value, and it is distributed to stakeholders, depending on individual contribution. Acting in the spirit to achieve their interests, the company is managed by a management team. Thus, defining business objectives, especially economic ones - and of these, first profit - has as a premise the recognition that any organization "promotes" the interests of these stakeholders.

• Establish firm course of action. To reach the performance must be known with certainty the economical - financial company, which is desirable (goals, mission, competitive advantage) but also how it can be

get there (strategic options, resources, time). Specify direction is essential and current tactical decisions and by their consistency will ensure its delivery. Efforts and enthusiasm of managers and employees as may be converging

long-term focus, a purpose.

• Focus employee efforts to achieve the objectives. This involves the orientation of attention towards those goods, works and services can be obtained by applying appropriate strategy and set strategic management. The agreement of the organization is more easily achieved if the strategy is clear and known components, and employees are motivated to participate in their implementation.

• Consistency of management actions and other employees of the organization to achieve the proposed strategy. Changing course of action, decisions with major implications for the organization or employees of stakeholders are not possible if practiced consciously assumed the responsibility, strategic management.

• Ensure organizational flexibility to exploit all opportunities but exogenous environmental and internal strengths. Echifinalitatea creates the possibility of achieving objectives even in difficult situations, by operating on alternative options

policy outlined in the strategy formulation process.



1.6 Limits of strategic management



While involvement in strategy formulation generate among participants a friendly behavior, managers must avoid two types of possible unintended consequences of strategic management:

• A first possible negative consequence is that strategic management process is costly in terms of time spent. Managers need to program common tasks while leaving time to work with strategic and avoiding the negative impact of their responsibilities such as operational, day.

• The second possible negative consequence is the adverse effects that may occur when people are involved and formulate strategy in its implementation, it is difficult to assign individual responsibilities other personae not involved in the process. As such, managers should be aware

promises in firm performance that may result from implementing the strategy, while the distractions of the environment are still important and can influence the whole process.



Chapter II



2.1 Business Strategies



Business strategies at the firm states that the company operating or intending to enter, and how resources will be shared between different business.

The essential aim of any business is achieving profit, its level being determined by the quality of measures taken under that, and the effectiveness and efficiency are achieved with the resources allocated. Consequently, the firm's strategic business units or at least most of them are profit centers within the firm, their strategy must be subordinate to the imperative to maximize long term profit realized.



2.1.1 Types of strategies in the strategic business units

Business strategies, set the strategic business units, are part of the firm's strategy contained therein. Each business strategies within a company are appropriate to specific situations that business, as defined by its position within the industry and is his own power. Therefore, business strategies have a significantly narrower scope than business strategy with a diversified portfolio which held the whole business synergy.

Industries in which companies doing business are very diversified in terms of structure, the stage is on the development curve, growth prospects posed by the characteristics presented by triad cost-price-profit, degree of competition in the market so specific. Also, firms - as competitors faces industry-specific market - has, in turn, a considerable diversity in terms of their competitive strength and position in the industry.

Dealing with the intense strategic alternatives following general issues of firms in different industries, M. Porter pointed out that despite the almost unlimited diversity of business conducted, can be identified, however, common strategic approaches that lead to the existence of three types of strategies applied by companies in the strategic business units namely (a) leading the field costs, (2) the differentiation of products / services, (3) focusing on a particular market segment. Companies that fail to develop their businesses on any of the types of strategies mentioned are "nailed in the middle" ("stuck in the middle), they have a poor strategic situation.

Among these strategies we can mention:

Strategy leader in cost - is followed by a strategic business unit within a company that appears able to produce and provide goods / services at a lower cost than competitors.

Hiring a strategic business unit under this strategy requires that it possess the capacity optimally designed in terms of efficiency, using manufacturing and marketing technologies aimed at reducing costs to market segments that have to Results show the beneficial advantages of learning and experience curve effects, be able to apply strict policies to reduce overheads. From reviewing the main general requirements for practice leader in cost strategy that, in essence, this means strict adherence to criteria of efficiency, strategic business unit level, in terms of significant experiences gained possession of production activities and marketing.

Most illustrative examples cited in the literature, well known companies who implement the lowest cost producer in the market are offered by companies Ford heavy truck production, Black & Decker tools in the field, Whirlpool in production major household electric equipment, the manufacture of pens BIC Pen etc..

Differentiation strategy - is followed by a strategic business unit within a company that is able to deliver products / services with features that make them be perceived as unique in the industry, ie significantly different from those of competitors.

Strategy Focus - is followed by a strategic business unit within a company where it focuses on a specific customer group, a segment of a product line or geographic market. The distinctive feature of this type of strategy is that the company specializes in serving only a certain part of the overall market that industry specific. Applying this strategy assumes that the company is able to better serve and effectively thousand a market segment than the other competitors who can operate the entire market or segment that its wider.

If the strategic business units "nailed in the middle" ("stuck in the middle) - strategic business units that prove unable to build and follow one of the types of strategies are presented in a critical strategic situation being considered suggestive, by M. Porter as "nailed in the middle."

To escape from such a bad state that companies must make fundamental strategic choices. They can choose the path to achieve leadership status in costs or at least reduce the level of costs at competing firms. They can also choose either to concentrate on a specific target identified judiciously (Strategy Focus) or for acquiring the uniqueness of products / services (differentiation strategy), assuming these two types of strategies to reduce market share and even covered total sales.



2.1.2 Functional R & D strategies

Importance of research and development function in an organization of economic activity is evidenced by the fact that one of the defining features of modern economies is the continued consolidation and proliferation of innovative firms, ie those who bring a very special emphasis on this function and acquire thus substantial competitive advantages in the market.

Functional strategies in research and development planning of these activities, appropriate for the organization of their specific d, coordinate specific actions to reduce cycle time research - development - production, strict control of their activities and consumption funds.

a) research and development planning is to specify the objectives, strategies, plans, programs and their budgets.

 In terms of research and development objectives, they are to maximize their competition to achieve the strategic objectives of the company, valued contribution in terms of economic contribution of innovation projects for new products / services and technologies. To this end, each project innovation is assessed according to its contribution to the firm's strategic goals and be given, therefore, a degree of priority.

 The objectives of development and assimilation in manufacturing related to productive activity, is expressed in broad terms, more difficult to measure (contribution to profit and sales volume, the savings achieved through increased production and reduced workload, the period for repayment of loans) or specific, more easily measured (technical performance of the new product or new technology, project cost, estimated cost of the product, the term for it).

 applied research objectives derived from the strategy adopted at the firm or strategic business unit and expressed in terms of new ideas for new services / products and technologies, tangible contribution to increasing the competitiveness of the company etc..

 Objectives of basic research - work that is not done, except very large reputable companies worldwide, the production companies - is expressed in very general terms such as degree of absolute novelty, projects, research intensity compared etc. competing firms.

 Strategy research-dezvolatare derived from overall business strategy and is determined by taking into account the following factors: the firm's environmental action - political, economic and social, technological and commercial potential of creative, innovative, productive and marketing company of its available resources.

Types of innovative strategies adopted so R & D, are the number five, but each exists a considerable variety of shades, the real strategy of a company being mentioned is the defining elements for two or more types.

Offensive strategy is aimed at acquiring the company followed by a technologically leading position in industry or trade, by marketing new products / services and technologies before competitors.

Defensive strategy is followed by the company that wants to keep its technologically or commercially acquired within the industry, such a strategy can be highly innovative, even if the company wants only to maintain current technological change or operation of any failures of adopting an offensive strategy by competitors.

Imitative strategy consists in the acquisition, licensing and acquisitions based on know-how, the achievements of innovative companies with leading positions in industry, the company will adopt, with a time lag, these firms.

Dependent strategy is followed by a small firm size has satellite or subordinate role of a large and powerful, which shall provide, as a subcontractor, or its components provide various technical services.

Interstitial strategy is followed by the company, analyzing strengths and weaknesses of a highly innovative company, identify its weaknesses they can exploit profitably if their corresponding strengths.

Links between research and development and production plan is achieved through technical, production assimilation R & D results, including: factors on products and technologies to be treated, whether their approval, approval time prototype, preparation of construction, put into production, responsible action, the necessary material means, the situation to ensure these tools, the economic effects anticipated. Duration assimilation of new products and technologies depend on the linkages between those activities.

Research and development budget is determined by the innovation strategy adopted and, implicitly, the relationship product - resulting in this market, the correlation between budget size and the strategy is clear. Budget is allocated to projects as necessary to follow his three co-plans: the compliance with the quotas allocated to specific (applied research, experimental development, assimilation in manufacturing) product relationship - marketing (four types of relations) of state completion of each project (planning and evaluation, implementation, application).

Also, always seeking the relationship between sales volume and company budget its research and development activities compared to the previous situation and, when possible, with state competitors.

b) research and development organization is determined by their specificity - the increased creative, innovative, nerepetitiv, must therefore be flexible, characterized, in turn, by devolving decision-making advanced, describing in general terms the functions and positions , increasing the role of informal information. An organization with such a characteristic structure corresponds to the "organic" (with diffuse lines defining hierarchical subdivision on the objectives, products, markets, customers, reduced specialization of functions, with emphasis on diversification and creativity, the large number of direct subordinates of the heads) , opposite the "mechanistic" as were suggestively named T. Burns and G. Stalker.

Operational strategy and appropriate policies in terms of research and development organization focused on the following issues:

 How to achieve R & D function in the company, which can be centralized, decentralized (where each strategic business unit has its own sector R & D) or matrix type (in which coexist functional divisions, which have specialized authority on all issues and actions in his profile, and teams - project, consisting of members of functional divisions placed under the authority of project leaders);

 Organization of R & D on themes of project work solving these issues is appropriate multidisciplinary team ensures that restructuring according to requirements issues.

c) Coordination of research and development is important in terms of specific structural mobility of these activities and the dynamic and competitive environment in which most businesses operate. The main issues pursued in coordination with operational strategy, specific R & D are:

 Ensure proper information flow along the path from idea to reduce manufacturing and marketing a new product;

 Establish work programs using appropriate tools such Grantt chart, PERT chart and CPM schedule in order to reduce as much as possible during the development and assimilation of a product.

d) control of research and development takes place on two levels, as governed by appropriate policies:

 Control of applied research, technological development and assimilation into production, the state that are innovation projects, the progress of work;

 Control of costs incurred for these activities in conjunction with the state of development works and compliance with specific regulations. Since innovation projects extending over a long period, more than during a financial year, compliance budgets for each project aims at long term.



2.2 Implementation Strategy



In the strategic management process, choosing the most appropriate step forward and formulate strategies in clear terms it is followed by the implementation of the strategy adopted. The transition from one phase to another means producing profound changes in the nature and content of the strategic approach: character pronounced intellectual, information, decision, thinking, analysis, strategic vision, entrepreneurial judgments, his formulation of the strategy is replaced by an action and work experience in the concrete circumstances of the firm or strategic business unit, characterized circumstances, often, conflicts, side effects, rejecting the idea of change that induces a new strategy, battle of interests, misunderstanding the meaning of change, or inadvertent errors deliberate.

In this context, the strategy is relevant evidence of the capacity of the leadership, its ability to stimulate the emergence and development of a state of mind, all personnel, favorable employment sessions commendable efforts that actually advertising strategy implementation . The existence of these states of mind, personal organization-wide, strategic approach is essential for success because, strategy formulation is almost the exclusive preserve of top management staff of the organization and its strategic application strategy is to load all personal involvement of employees overall collective effort and ability as some of the most important determinants of success or failure of implementation. In addition, if the strategy formulation change policy options, as intellectual exercise can be done relatively easily, the stage of application, changing the mentality and behavior of humans to adapt better to the needs of the new strategy is much harder to accomplish.

Difficulty of applying the strategy is determined by the complexity of pragmatic year, assuming this deployment, several plans of action focused and co:

- Detailing operational strategies and solve possible conflicts between functional areas, establish policies and procedures necessary to set limits within which to register the results of implementation:

- Agree the functional strategies with the requirements of the firm's strategy or business unit and hiring, according to these requirements, available resources;

- Proper structuring of the organization according to the strategy adopted for the purposes of rigorous definition of collective and individual tasks and the authority and responsibility;

- Involvement in the strategy session management and effective training to all staff in the process, clarifying the strategy in the minds of staff through several speeches, collective and employed explicit discussion about its implications on the various units, suitable examples;

- Detailed communication, to the whole organization, the strategy adopted and its requirements;

- Change the system of incentives for desired behavior of employees in the strategy;

- Control system on adaptation requirements of the implementation of the strategy, the purpose of highlighting the progress made in implementation and the problems it generates continual process.

Listing these various plans that place the actions of the strategy offers considerable diversity image methods and techniques used during the implementation phase, each plan's specific to being a range of specific instruments. Diversity of methods and techniques applicable to all plans listed show that their use must be comprehensive, meaning the call while the entire record available, and secondly, consistent, coherent, which means the agreement of the solutions, sometimes conflicting accounts on the basis of using different methods and techniques (eg, the agreement functional marketing strategy to increase sales volume with directions to improve employee motivation system, which should be directed, say, to maintain the level current sales by customer).

The strategy puts so much more difficult problem management organization - business or its strategic business unit - rather than defining the strategy. Specialists in strategic management are unanimous in determining that it is much easier to establish a comprehensive strategic plan judiciously and only its translation into reality.

The primary responsibility in the strategy is, naturally, the executive head of the organization, "top" management team. It may take different paths to the strategy set:

• assuming, based on centralized decision process application, key role, getting even more decision-making and control, or, conversely, significant decentralization of decision-making skills and decision making by consensus, and a secondary role rezevându yet effective;

• setting the pace of the strategy - very fast, which means carry out the actions decided on several fronts simultaneously, or slow, characterized by the gradual application of the strategy over a longer period of time.

2.2 Implementation Strategy




In the strategic management process, choosing the most appropriate step forward and formulate strategies in clear terms it is followed by the implementation of the strategy adopted. The transition from one phase to another means producing profound changes in the nature and content of the strategic approach: character pronounced intellectual, information, decision, thinking, analysis, strategic vision, entrepreneurial judgments, his formulation of the strategy is replaced by an action and work experience in the concrete circumstances of the firm or strategic business unit, characterized circumstances, often, conflicts, side effects, rejecting the idea of change that induces a new strategy, battle of interests, misunderstanding the meaning of change, or inadvertent errors deliberate.

In this context, the strategy is relevant evidence of the capacity of the leadership, its ability to stimulate the emergence and development of a state of mind, all personnel, favorable employment sessions commendable efforts that actually advertising strategy implementation . The existence of these states of mind, personal organization-wide, strategic approach is essential for success because, strategy formulation is almost the exclusive preserve of top management staff of the organization and its strategic application strategy is to load all personal involvement of employees overall collective effort and ability as some of the most important determinants of success or failure of implementation. In addition, if the strategy formulation change policy options, as intellectual exercise can be done relatively easily, the stage of application, changing the mentality and behavior of humans to adapt better to the needs of the new strategy is much harder to accomplish.

Difficulty of applying the strategy is determined by the complexity of pragmatic year, assuming this deployment, several plans of action focused and co:

- Detailing operational strategies and solve possible conflicts between functional areas, establish policies and procedures necessary to set limits within which to register the results of implementation:

- Agree the functional strategies with the requirements of the firm's strategy or business unit and hiring, according to these requirements, available resources;

- Proper structuring of the organization according to the strategy adopted for the purposes of rigorous definition of collective and individual tasks and the authority and responsibility;

- Involvement in the strategy session management and effective training to all staff in the process, clarifying the strategy in the minds of staff through several speeches, collective and employed explicit discussion about its implications on the various units, suitable examples;

- Detailed communication, to the whole organization, the strategy adopted and its requirements;

- Change the system of incentives for desired behavior of employees in the strategy;

- Control system on adaptation requirements of the implementation of the strategy, the purpose of highlighting the progress made in implementation and the problems it generates continual process.

Listing these various plans that place the actions of the strategy offers considerable diversity image methods and techniques used during the implementation phase, each plan's specific to being a range of specific instruments. Diversity of methods and techniques applicable to all plans listed show that their use must be comprehensive, meaning the call while the entire record available, and secondly, consistent, coherent, which means the agreement of the solutions, sometimes conflicting accounts on the basis of using different methods and techniques (eg, the agreement functional marketing strategy to increase sales volume with directions to improve employee motivation system, which should be directed, say, to maintain the level current sales by customer).

The strategy puts so much more difficult problem management organization - business or its strategic business unit - rather than defining the strategy. Specialists in strategic management are unanimous in determining that it is much easier to establish a comprehensive strategic plan judiciously and only its translation into reality.

The primary responsibility in the strategy is, naturally, the executive head of the organization, "top" management team. It may take different paths to the strategy set:

• assuming, based on centralized decision process application, key role, getting even more decision-making and control, or, conversely, significant decentralization of decision-making skills and decision making by consensus, and a secondary role rezevându yet effective;

• setting the pace of the strategy - very fast, which means carry out the actions decided on several fronts simultaneously, or slow, characterized by the gradual application of the strategy over a longer period of time.

The main factors resulting in "personality" of the organization and its internal situation and for choosing a course of strategy implementation or another are usually:

 experience and knowledge about the relevant business manager, his managerial skills;

 personality, behavioral traits and action;

 age its function, it enjoys real authority among the organization staff, network of relationships which has its prominent members;

 diagnostic conclusions which he himself and the situation of the organization's competitive position in its market;

 the nature of the proposed strategic change its scale;

 availability of financial resources and management of the organization;

 pressure for short-term achievement of superior performance;

 degree of consolidation of specific behavioral patterns of staff organization, the intensity of its resistance to change;

 leadership style is his own.

Depending on the intensity factors listed to choose one action or another course of implementation of the strategy that is most suitable position at that company and its presence in the environment of action. The fact is that the process of applying each strategy is unique, unrepeatable, claiming the manager coordinator thorough knowledge of all requirements of the implementation process, careful determination of priority actions to be undertaken and who will succeed.



2.3 Appropriate strategies of various industries and competitive situations



Choosing the firm competitive strategies to be followed by its strategic business units is based on two factors - the situation in which industry operates each strategic business unit and its competitive position in its environment action. In relation to these factors, the company his "Battle as" that follows its strategy, the adequacy of the strategy to position the industry and determining its own, the crucial measure, the chances of success.

Analysis of expression of these two factors and response to their action enables companies to highlight the following typical competitive strategies in the strategic business units suitable for various industrial environments and competitive situations:

• Strategy or firms with a dominant leader

• Strategy firms occupying second place on the market

• strategy firms in stationary or declining situation

• Business strategy reversal in risk and crisis

• Competitive Strategy in the industries young emerging

• Competitive strategy during the transition to industry maturity

• competitive strategy in mature or declining industries

• competitive strategy in fragmented industries

• competitive strategy in global industries



Strategy firms dominated leadership or

Such a strategy is focused on determining the most efficient and effective ways to enhance their business achievements and to maintain or gain leadership in the industry.

For these purposes, firms with dominant leadership or can be placed in one of the following competitive situations.

a) continue the offensive strategy based on clear idea that the best defense is attack. Offensive strategy is based, prevailing on a considerable innovative potential, able to continuously generate new products / services and launch incessant "challenges" unexpected competitors. Key areas to focus the company's creative potential contribution to the pursuit of further aggressive strategy would be:

- Maintaining a high rate of innovation of products / services, with improved structural characteristics and always functional and diversified;

- The development and implementation of effective solutions is continuously raising the quality level of products / services;

- Improving and diversifying the after-sales;

- Reduce costs of manufacturing and marketing;

- Synergistic use of different channels available;

- Growth of demand in the industry by identifying new uses for products / services sold, attracting new buyers of these products / services, increase appropriate promotional means their use;

- Achieving organizational restructuring for flexibility to work increasingly firm and its closer connection to the market;

- Improving management, management tools used methods AND, business management system.

Companies that are most offensive strategy, so those who have the greatest capability to materialize them, trying always to "make the first move" given the considerable competitive advantages that it entails, and to maintain leadership to strengthen long-term competitive advantages.

Firms reputation which is its such a competitive position as General Motors in manufacturing automobiles, IBM not have computers, Xerox in the production of photo-copiers, AT & T in telephone services at a great distance, Levi Strauss in the production of clothing jeans McDonald's restaurants in the area specifically so.

b) The "grab and maintain" a good defense is focused on the achievements of the company in order to deter potential newcomers to penetrate its market, to prevent competitors and increase business to the detriment of themselves or to launch offensive actions, and move the areas of confrontation with competitors to less threatening areas or where the company is capable of stronger response. The essence of this competitive situation the firm is to create the kind of barriers to allow presentation held position on the market before competitors and, on this basis, strengthening the competitive advantage perspective. Maintaining market position of competing against the company stands on the one hand, they retain the ability to generate profits and positive cash flow (where the growth prospects of the industry are small and not be seen other opportunities to increase market share covered), on the other hand, reduces the possibility of being accused of anti-competitive practices (where the market segment covered by the leading company gave it a virtual monopoly).

c) of harassment competitive strategy, focusing on strong affirmation of company responsiveness to any attempts of competitors to erode the market position within the meaning clear messages to launch crackdown on measures that will accompany such tests. The purpose of this strategy of harassment and is facing strong competitors to keep the status quo on the market, that its own hierarchies that the roles are clearly defined marketing firms in terms of "who rules" and "Who seeks leader.



2.4 Creating and maintaining competitive advantages



All strategies are truly beneficial to confirm the company, provided they are set sensibly, properly implemented and followed consistently, but if it creates and provides the perspective of maintaining competitive advantages for business. These advantages allow more and better positioning the company in the industry specific markets and increases its operating force which faces other competitors.

Competitive advantages of a company are very different and may consist of:

• large or very large size of it;

• offering products / services at the lowest price or highest quality;

• offering products / services best adapted to the requirements of buyers;

• dominate a specific market segment (comprising a specific group of buyers, a geographical area etc.).

• providing a bigger global values for the price received, which is a judicious combination and very attractive to buyers of high quality, affordable, great service, etc..

The common denominator of all those competitive advantages, regardless of the strategy for acquiring and maintaining them, is to create a viable and sufficiently large segment of buyers who are interested in buying products / services firm that they perceive as having value superior overall.





2.4.1 Creating and sustaining competitive advantage in offensive strategy

Offensive strategies that companies are trying to take initiative and maintain a certain level of competition, forcing thus the other competitors to react defensively.

For a company to successfully pursue an offensive strategy and to create, on this basis, competitive advantage, must possess the following essential capabilities:

• provision of key that will be coordinated to include activities and changes that will follow them out as the strategic development;

• determining the main actions directed at weakening the main competitors, their order to maintain the defensive and preventing them to launch their own offensive actions;

• concentration at the time and place of their competitive strength to achieve key goals;

• making and maintaining the initiative, building upon the operational and efficient as opportunities arise, operating profitable competitors weaknesses;

• Operating the surprise element in the meaning "striking" at times competing targets and the points where they are not prepared to react appropriately;

• capacity to neutralize strong competitors to react, before launching into a major offensive towards them;

• employment on a strategic course differs considerably from that of competitors, to initiate offensive actions in respect of this course can not be easily imitated by other firms that have more favorable effects for the firm than rival firms;

• by making "the first movement" in order to gain a pre-emptive before competitors, namely the creation of such conditions that they do face considerable difficulties in trying to follow a similar strategy.

Depending on prevailing capabilities available from the suite of listed company may engage in one of the following strategies for creating and maintaining offensive its competitive advantages.

a) frontal attack strengths of competitors, a strategy that is clearly bold and whose success will depend on the company's employment initiative, its competitive strength and power of response to competitors. Launch such an attack requires a ratio between resources and forces the company and originator of a competing firms higher than for the former.

Conducted on a broad front attack is based on a broad range of initiatives in various areas of business activity: increasing R & D and increasing innovation new products / services, extension of production capacities, improve performance and improve its products and services, significantly reducing costs, increasing promotional activities, expanding the range of after sales services etc..

Selective frontal attack means sorting offensive tactics are used and are limited mostly to a single but very important initiative. Selective frontal attack is most often used at the originator company offers products / services similar to those of the firm's market leader but to lower prices, the success of such an attack depends on value for money - cost - specific volume originator firm offer within the meaning of the measure discounts the profit margin decreases and increases in sales volume offset this decline.

b) attack the weaknesses of rival firms, which is based on the concentration of company resources and competitive force initiating the operation profitable rivals weakness. In such an offensive strategy, which is significantly higher chance of success than the previous one, the main lines of attack concerns, most often, the following weaknesses of other companies on the market:

• market segments that rivals have failed or have the resources and capacity to serve them adequately;

• areas where competitors have a lower market share and are not capable of a sustained competitive effort;

• products / services of competitors who have backlogs of technically and technologically and provide such opportunities to develop new market segments;

• products / services whose quality level was not subject to special concerns of competitors;

• Promotional activities in which competitors do not have the skills necessary to conduct intensive and effective campaigns to exploit the full potential of market absorption, leaving thus the possibility of extending the company initiates attack market segment covered with products / services them.

c) attack on several fronts simultaneously, which is a very aggressive strategy, based on multiple key initiatives launched simultaneously in different fields of business, so competitors are surprised by the intensity and extension of the attack and be forced to appears on different levels. Specific actions of this strategy are to reduce costs, win new customers du groups with specific requirements, thus extending the market segment covered, improve performance and quality of products / services, etc. multiply and intensify promotional campaigns. Attack on multiple fronts strategy must be supported by a considerable level of resources the company initiates to eat in their efforts to access the market leadership and to create substantial and lasting competitive advantages.

d) Bypass offensive strengths of competing firms, which is to prevent direct attacks against competitors and launching initiatives such as making some leaps in technology innovation, the launch of products / services with different characteristics of the existing entry from new geographic markets, etc.. When offensives in the directions mentioned, are so conducted as to not be perceived as threat to rival firms, their chances of success are greatly increased as other companies do not react quickly and strongly, and the originator company can gain advantage of making " first movements.

e) type offensive "guerrilla", consisting of attacking at the time and favorable items, those items on the ground that a more modest company can compete successfully other competitors because its capabilities match those elements. This strategy of "harassment" is appropriate for smaller businesses who lack the resources to competitive strength and commitment in previous types of strategies. Such offensives may include:

• a narrow market segment, which are characteristic to specific requirements and are not interested in competing firms;

• broad fronts that competitors have expanded excessively, making them the resources allocated to different segments of the front is modest, this situation causes the existence of niches that can be adequately served by small firms (providing specialized technical services when product offerings of competitors is very large in terms of patterns and structural and functional characteristics, serving customers in sparsely populated areas, ensuring the supply frequency is not economical for competitors etc.).

• Various special targets by which to "harass" competitors such as promotional campaigns explosive successive price reductions, etc. legal action against antitrust practices.

f) pre-emption strategy, which consists of carrying out "first move" on the market to acquire and secure an advantageous position to accede company which competitors are excluded or discouraged to participate.

Ways that a business can gain an advantageous position in the industry based on making a preempţionale movements are different:

• Hiring sooner than competitors, long-term contractual relationships with the best, most advantageous and safer market suppliers or competitors before making back to ensure vertical integration of supply with raw materials;

• Expanding production capacity ahead of competitors based on anticipation, sufficiently in advance of increased demand on the market to deter other companies follow the same path, allowing the company to increase its sales volume originator when market demand will increase;

• Employment in the time of the geographical locations of their best units, in which labor is required, close to sources of supply and outlets, with the necessary technical facilities, with reduced transport costs, etc..;

• Ensure access only or preponderant, the best distribution channels operating in the area;

• Imposing a distinct image in the minds of buyers of the company, which takes into account the psychology of their uniqueness to inculcate the idea of company products / services and it is difficult to compete against them.

Analysis reveals that review submitted preemptive strategy involves not annul any possibility for competitors to imitate or follow such a strategy, but means, in essence, create competitive advantage by making the "first move" and employment "first position" ie that which is relatively easy to defend and prints, in a way, how to carry out competition in the industry.































References



1. Philip Kotler - Marketing Management ", Ed Theory, Bucharest, 1997

2. Corneliu Rusu - "Strategic Management", Bucharest 1999

3. Elena-Marilena corn - "Strategic Management of Resources Materials, Bucharest 2000

4. Istocescu Amedeo - Strategy and Strategic Management of the Firm ", ASE, Bucharest 2003

5. Istocescu Amedeo - Strategy and Strategic Management of the Organisation. Fundamental Concepts. Managerial Applications, ASE, Bucharest 2004

6. Svetlana Şişcanu-Zorin - Substantiation of new approaches to strategic and cross-cultural ", Chisinau 2006

7. Dumitru Lazar - "Marketing Fundamentals" Volume I, Edition Star Software, Alba Iulia 1999

8. Nicolescu O., Verbonciu I. - "Management, Economic Publishing House, Bucharest 1999







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