Professional Documents
Culture Documents
LECTURE 1
INTRODUCTION TO STRATEGIC
MANAGEMENT
What is Strategic
Management?
Strategic Management
Management
Marketing
Finance/Accounting
Production/Operations
MIS
Strategic management
Emergence of Strategic
Management
von Clausewitz,
Early contributors
Alfred D. Chandler,
Philip Selznick,
Igor Ansoff, and
Peter Drucker.
newtechnologies,globalization,cultural pluralism,
andknowledge capital.
In 1978,Dereck Abelldescribedstrategic
windows
In 1996,Adrian Slywotzky
In 2000,Gary
Hameldiscussedstrategic decay
1) complexity is escalating,
2) enterprises are not equipped to cope
with this complexity, and
3) creativity is now the single most
important leadership competency. IBM said
that it is needed in all aspects of leadership,
including strategic thinking and planning
Strategy Cycle
Strategy Formulation
Vision & Mission
External Opportunities & Threats
Internal Strengths & Weaknesses
Long-Term Objectives
Alternative Strategies
Strategy Selection
Issues in Strategy
Formulation
New
Newbusiness
businessopportunities
opportunities
Businesses
Businessesto
toabandon
abandon
Allocation
Allocationof
ofresources
resources
Expansion
Expansionor
ordiversification
diversification
International
Internationalmarkets
markets
Mergers
Mergersor
orjoint
jointventures
ventures
Avoidance
Avoidanceof
ofhostile
hostile
takeover
takeover
Strategy Implementation
Annual Objectives
Policies
Employee Motivation
Resource Allocation
Strategy
Implementation
Action
ActionStage
Stageof
ofStrategic
Strategic
Management
Management
Most
Mostdifficult
difficultstage
stage
Mobilization
Mobilizationof
of
employees
employees&&managers
managers
Interpersonal
Interpersonalskills
skills
critical
critical
Consensus
Consensuson
ongoal
goal
pursuit
pursuit
Strategy Evaluation
Internal Review
External Review
Performance Metrics
Corrective Actions
Strategy
Evaluation
Final
FinalStage
Stageof
ofStrategic
Strategic
Management
Management
Subject
Subjectto
tofuture
future
modification
modification
Todays
Todayssuccess
successno
no
guarantee
guaranteeof
offuture
futuresuccess
success
New
New&&different
differentproblems
problems
Complacency
Complacencyleads
leadsto
to
demise
demise
Prime Task of
Strategic Management
Past experiences
Judgment
Feelings
Intuitive Thinking
Adapting to Change
process
Internal and external events
Timely changes
Achieving Sustained
Competitive Advantage
1. Adapting to change in external trends,
internal capabilities and resources
Adapting to Change
Rate & magnitude of change
increasing dramatically
E-commerce
Demographics
Technology
Adapting to Change
Effective Adaptation
Key Terms
Key Terms
Strategists Firms success/failure
Various Job Titles:
Chief Executive Officer (CEO)
Chief Strategy Officer (CSO)
President
Owner
Board Chair
Executive Director
Key Terms
Vision Statement
What do we want to become?
Mission Statement
What is our business?
Key Terms
Key Terms
Opportunities & Threats (External)
Analysis of Trends:
Economic
Social
Cultural
Demographic/Environmental
Technological
Competitors
Key Terms
Opportunities & Threats
Environmental Scanning (Industry Analysis)
Key Terms
Opportunities & Threats
Basic Tenet of Strategic
Management
Take
Takeadvantage
advantageof
of
External
ExternalOpportunities
Opportunities
Strategy Formulation
Avoid/minimize
Avoid/minimizeimpact
impactof
of
External
ExternalThreats
Threats
Key Terms
Strengths & Weaknesses (Internal)
Key Terms
Strengths & Weaknesses (Internal)
Typically located in functional areas of the firm
Management
Marketing
Finance/Accounting
Production/Operations
Key Terms
Strengths & Weaknesses
Assessing the Internal
Environment
Financial Ratios
Performance Metrics
Internal Factors
Industry Averages
Survey Data
Key Terms
Long-term Objectives
Key Terms
Long-term Objectives
Essential for ensuring the firms success
Provide direction
Aid in evaluation
Create synergy
Focus coordination
Key Terms
Strategies
Strategies
Key Terms
Some Examples
Geographic expansion
Diversification
Acquisition
Market penetration
Retrenchment
Liquidation
Joint venture
Key Terms
Annual Objectives
Key Terms
Policies
Strategic Management
Models
Vision
&
Mission
Long-Term
Objectives
Internal
Audit
Generate,
Evaluate,
Select
Strategies
Implement
Strategies:
Mgmt Issues
Implement
Strategies:
Marketing,
Fin/Acct,
R&D
Measure &
Evaluate
Performance
Vision
Mission
Objectives
Strategies
MISSION
VISION
SWOT Analysis
Internal Environment
Strengths
Weaknesses
- Value systems
- Culture
- Staffing
- Support systems, operating environment
External Environment
Opportunities
Threats
- The changing environment
- The demand for new products
- The economic environment
- Availability of resources
Strategic
Action 1
Strategic
Action 2
Strategic
Action 3
EVALUATION/FEEDBACK
Strategic
Action 4
Benefits of Strategic
Management
Benefits of Strategic
Management
Proactive in shaping firms future
Benefits of Strategic
Management
Financial Benefits
Improvement in sales
Improvement in profitability
Productivity improvement
Benefits of Strategic
Management
Non-Financial Benefits
Improved understanding of competitors strategies
Enhanced awareness of threats
Reduced resistance to change
Enhanced problem-prevention capabilities
Benefits of Strategic
Management (Greenley)
1. Identification of Opportunities
2. Objective view of management problems
3. Improved coordination & control
4. Minimizes adverse conditions & changes
5. Decisions that better support objectives
Benefits of Strategic
Management (Greenley contd)
6. Effective allocation of time & resources
7. Internal communication among personnel
8. Integration of individual behaviors
9. Clarify individual responsibilities
10. Encourage forward thinking
Benefits of Strategic
Management (Greenley contd)
11. Encourages
change
12. Provides
SOME ADDITIONAL
PERSPECTIVES ON
HISTORY OF
STRATEGIC
Old times
1960s
1970
1980s
1990s
2000s
Course Outline
Part 1: Fundamentals
Lecture
LECTURE
Strategy Formulation
Strategy Implementation
Strategy Evaluation and Control
Part 3: Application
12
10
11
13
14
15
Project Presentations
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