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    Srategic Management

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    sims_uni
    Strategies refer to the decisions and actions that determine the long-term performance of an organization. The strategic management process involves identifying the organization's mission and objectives, conducting external and internal analyses, formulating strategies, implementing strategies, and evaluating results. Key aspects of strategic management include conducting SWOT and competitive analyses, developing corporate and business level strategies around areas like growth, stability, and renewal, and determining competitive strategies around cost leadership, differentiation, and focus.

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    Srategic Management

    Uploaded by

    sims_uni
    637 views30 pages
    Strategies refer to the decisions and actions that determine the long-term performance of an organization. The strategic management process involves identifying the organization's mission and objectives, conducting external and internal analyses, formulating strategies, implementing strategies, and evaluating results. Key aspects of strategic management include conducting SWOT and competitive analyses, developing corporate and business level strategies around areas like growth, stability, and renewal, and determining competitive strategies around cost leadership, differentiation, and focus.

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    Strategies refer to the decisions and actions that determine the long-term performance of an organization. The strategic management process involves identifying the organization's mission and objectives, conducting external and internal analyses, formulating strategies, implementing strategies, and evaluating results. Key aspects of strategic management include conducting SWOT and competitive analyses, developing corporate and business level strategies around areas like growth, stability, and renewal, and determining competitive strategies around cost leadership, differentiation, and focus.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    637 views30 pages

    Srategic Management

    Uploaded by

    sims_uni
    Strategies refer to the decisions and actions that determine the long-term performance of an organization. The strategic management process involves identifying the organization's mission and objectives, conducting external and internal analyses, formulating strategies, implementing strategies, and evaluating results. Key aspects of strategic management include conducting SWOT and competitive analyses, developing corporate and business level strategies around areas like growth, stability, and renewal, and determining competitive strategies around cost leadership, differentiation, and focus.

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    of 30

    What is strategies?

    Definition
    “ A route to achieve the organization goal “

    “ the decision and action that determine


    the long run performance of an
    organization”
    Strategic Management
    The set of managerial decisions
    and actions that determines
    the long-run performance
    of an organization
    Importance of strategic
    management
    1. It results in higher organizational
    performance.
    2. It requires that managers examine and adapt
    to business environment changes.
    3. It coordinates diverse organizational units,
    helping them focus on organizational goals.
    4. It is very much involved in the managerial
    decision-making process.
    The Strategic Management
    Process
    Strategic Management
    Process
    Step 1: Identifying the organization’s current
    mission, objectives, and strategies
    Step 2: Conducting an external analysis
    Step 3: Conducting an internal analysis
    Step 4: Formulating strategies

    Step 5: Implementing strategies

    Step 6: Evaluating Results


    Explanations of Steps
    STEP # 1
    : Identifying the organization’s current mission,
    objectives, and strategies
    MISSION STATEMENT
    Mission : the firm’s reason for being
     The scope of its products and services

    Goals: the foundation for further planning


     Measurable performance targets
    SAMPLE OF MISSION
    STATEMENT
    “PEPSI”
    To be the world's premier consumer Products
    Company focused on convenient foods and
    beverages. We seek to produce healthy
    financial rewards to investors as we provide
    opportunities for growth and enrichment to our
    employees, our business partners and the
    communities in which we operate. And in
    everything we do, we strive for honesty,
    fairness and integrity."
    STEP#2&3
    SWOT ANALYSIS
    Ø Strength

    Ø Weakness

    Ø Opportunity

    Ø Threats
    SAMPLE OF SWOT
    ANALYSIS
     Strength
    • Pepsi has a broader product line and outstanding reputation.
    • Merger of Quaker Oats produced synergy across the board.
    • Record revenues and increasing market share.
    • Lack of capital constraints (availability of large free cash flow).
    o Great brands, strong distribution, innovative capabilities
    o Number one maker of snacks, such as corn chips and potato chips
    • PepsiCo sells three products through the same distribution
    channel.
    For example, combining the production capabilities of Pepsi,
    Gatorade and Tropicana is a big opportunity to reduce costs, improve
    efficiency and smooth out the impact of seasonal fluctuations in
    demand for particular product.

    Weakness
    • Pepsi hard to inspire vision and direction for large global company.
    • Not all PepsiCo products bear the company name
    Opportunity
    • Food division should expand internationally
    • Noncarbonated drinks are the fastest-growing part of the
    industry
    • There are increasing trend toward healthy foods
    • Focus on most important customer trend - "Convenience".

    Threats
    • F&B industry is mature
    • Pepsi is blamed for pesticide residues in their products in
    one of their most promising emerging market e.g in India
    • Over 50 percent of the company's sales come from Frito-
    Lay; this is a threat if the market takes a downturn
    • PepsiCo now competes with Cadbury Schweppes, Coca-
    Cola, and Kraft foods (because of broader product line) which
    are well-run and financially sound competitors.
    • Size of company will demand a varied marketing program;
    Social, cultural, economic, political and governmental
    STEP#4
    Formulating strategies
    Develop and evaluate strategic alternatives
    Select appropriate strategies for all levels in the
    organization that provide relative advantage
    over competitors
    Match organizational strengths to environmental
    opportunities
    Correct weaknesses and guard against threats
    STEP#5&6
    Implementing strategies
     Implementation: effectively fitting organizational structure and
    activities to the environment
     The environment dictates the chosen strategy; effective strategy
    implementation requires an organizational structure matched to
    its requirements.
     Implementation is the important part if implementation is wrong we
    cannot get desire result
    Evaluating Results
    How effective have strategies been?
    What adjustments, if any, are necessary?
    Levels of Organizational
    Strategy
    Organizational Strategies
    Corporate-Level Strategies

     Top management’s overall plan for the entire


    organization and its strategic business units

    III. GROWTH

    V. STABILITY

    VII. RENEWAL
    Growth Strategy
    Seeking to increase the organization’s business by
    expansion into new products and markets.
    Types of Growth Strategies
    Concentration
    Vertical integration
    Horizontal integration
    Diversification
    Concentration
    Focusing on a primary line of business and
    increasing the number of products offered or
    markets served.
    Vertical Integration
    Backward vertical integration: attempting to gain
    control of inputs (become a self-supplier).
    Forward vertical integration: attempting to gain
    control of output through control of the
    distribution channel and/or provide customer
    service activities (eliminating intermediaries).
    Horizontal Integration.
    Combining operations with another competitor in
    the same industry to increase competitive
    strengths and lower competition among industry
    rivals.
    Related Diversification.
    Expanding by merging with or acquiring firms in
    different, but related industries that are
    “strategic fits”.
    Unrelated Diversification.
    Growing by merging with or acquiring firms in
    unrelated industries where higher financial
     Stability Strategy
     A strategy that seeks to maintain the status quo to deal
    with the uncertainty of a dynamic environment, when the
    industry is experiencing slow- or no-growth conditions, or if
    the owners of the firm elect not to grow for personal
    reasons.
     Renewal Strategies
     Developing strategies to counter organization weaknesses
    that are leading to performance declines.
     Retrenchment: focusing of eliminating non-critical
    weaknesses and restoring strengths to overcome current
    performance problems.
     Turnaround: addressing critical long-term performance
    problems through the use of strong cost elimination
    measures and large-scale organizational restructuring
    solutions.
    Corporate portfolio
    Analysis
    BCG Matrix
    Developed by the Boston Consulting Group
    Considers market share and industry growth rate
    Classifies firms as:
     Cash cows: low growth rate, high market share
     Stars: high growth rate, high market share

     Question marks: high growth rate, low market share

     Dogs: low growth rate, low market share


    The BCG Matrix
    Business-Level Strategy
    Business-Level Strategy
    A strategy that seeks to determine how an
    organization should compete in each of its SBUs
    (strategic business units).
    Competitive Advantage
    Competitive Advantage
    An organization’s distinctive competitive edge
    that is sourced and sustained in its core
    competencies.
    Quality as a Competitive Advantage
    Differentiates the firm from its competitors.
    Can create a sustainable competitive advantage.
    Represents the company’s focus on quality
    management to achieve continuous
    improvement and meet customers’ demand for
    quality.
    Forces in the Industry
    Analysis
    FIVE COMPITATIVE
    FORCES
    Threat of New Entrants

    Threat of Substitutes

    Bargaining Power of Buyers

    Bargaining Power of Suppliers

    Current Rivalry
    Competitive Strategies
    Cost Leadership Strategy
    Seeking to attain the lowest total overall costs
    relative to other industry competitors.
    Differentiation Strategy
    Attempting to create a unique and distinctive
    product or service for which customers will pay a
    premium.
    Focus Strategy
    Using a cost or differentiation advantage to
    exploit a particular market segment rather a
    larger market
    Strategic Management

    The Rule of Three


    Strategies for Applying e-
    Business Techniques
    Cost Leadership
    On-line activities: bidding, order processing,
    inventory control, recruitment and hiring
    Differentiation
    Internet-based knowledge systems, on-line
    ordering and customer support
    Focus
    Chat rooms and discussion boards, targeted web
    sites
    Customer Service
    Strategies
    Giving the customers what they
    want.
    Communicating effectively with
    them.
    Providing employees with customer
    service training.
    Innovation Strategies
    Possible Events
    Radical breakthroughs in products.
    Application of existing technology to new uses.
    Strategic Decisions about Innovation
    Basic research.
    Product development.
    Process innovation.
    First Mover
    An organization that brings a product innovation
    to market or use a new process innovations.

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