Strategic Management: An Overview of The Subject - Conceptualize The Managerial Policy
Strategic Management: An Overview of The Subject - Conceptualize The Managerial Policy
Strategic Management: An Overview of The Subject - Conceptualize The Managerial Policy
Management Marketing
Finance/Accounting Production/Operations
Long-Term Objectives
Alternative Strategies
Strategy Selection
Issues in Strategy Formulation
New
Newbusiness
businessopportunities
opportunities
Businesses
Businessesto
toabandon
abandon
Allocation
Allocationof
ofresources
resources
Expansion
Expansionorordiversification
diversification
International
Internationalmarkets
markets
Mergers
Mergersororjoint
jointventures
ventures
Avoidance
Avoidanceofofhostile
hostiletakeover
takeover
Strategy Implementation
Annual Objectives
Policies
Employee Motivation
Resource Allocation
Strategy Implementation
Action
ActionStage
Stageof
ofStrategic
Strategic
Management
Management––
Most
Mostdifficult
difficultstage
stage
Mobilization
Mobilizationofofemployees
employees& &
managers
managers
Interpersonal
Interpersonalskills
skillscritical
critical
Consensus
Consensusonongoal
goalpursuit
pursuit
Strategy Evaluation
Internal Review
External Review
Performance Metrics
Corrective Actions
Strategy Evaluation
Final
FinalStage
Stageof
ofStrategic
StrategicManagement
Management
Subject
Subjectto
tofuture
futuremodification
modification
Today’s
Today’ssuccess
successno
noguarantee
guaranteeof
of
future
futuresuccess
success
New
New& &different
differentproblems
problems
Complacency
Complacencyleads
leadsto
todemise
demise
Prime Task of
Strategic Management
Peter Drucker: -- Think through the overall
mission of a business. Ask the key question:
“What is our Business?”
Integrating Intuition and Analysis
The strategic management process attempts to
organize quantitative and qualitative
information under conditions of uncertainty
Integrating Intuition and Analysis
Intuition is based on:
– Past experiences
– Judgment
– Feelings
Analytical Thinking
Intuitive Thinking
Adapting to Change
Organizations must monitor events
• On-going process
• Internal and external events
• Timely changes
Strategic Management is Gaining and
Maintaining Competitive Advantage
“Anything that a firm does especially
well compared to rival firms”
Achieving Sustained Competitive
Advantage
Implementation
Control
Strategic Management Model
Strategic Management Components
• Company Mission • Internal Analysis
• External Analysis • Strategic Analysis &
• Long-Term Objectives Choice
• Short-Term Objectives • Generic & Grand
• Policies Empowering Action Strategies
• • Functional Tactics
Strategic Control &
Continuous Improvement • Restructuring,
Reengineering &
Refocusing
Key Terms
Opportunities and Threats (External)
• Largely beyond the control of a single
organization
Key Terms
Opportunities & Threats (External)
Analysis of Trends:
Economic
Social
Cultural
Demographic/Environmental
Political, Legal, Governmental
Technological
Competitors
Key Terms
Opportunities & Threats
Environmental Scanning (Industry Analysis)
– Process of conducting research and gathering and
assimilating external information
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)
Controllable activities performed
especially well or poorly
Key Terms
Strengths & Weaknesses (Internal)
Typically located in functional areas of the firm
Management
Marketing
Finance/Accounting
Production/Operations
Research & Development
Computer Information Systems
Key Terms
Strengths & Weaknesses
Assessing the Internal Environment
Financial Ratios
Performance Metrics
Internal Factors
Industry Averages
Survey Data
Key Terms
Long-term Objectives
Chapter 3
Internal
Audit
Chapter 4
Strategic Management Model
Strategic Management Process
Dynamic & Continuous
More formal in larger organizations
Strategic Management Model
Audit external environment
• 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
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
6. Effective allocation of time & resources
7. Internal communication among personnel
8. Integration of individual behaviors
9. Clarify individual responsibilities
10. Encourage forward thinking
11. Encourages favorable attitude toward change
12. Provides discipline and formality to the management of the business
Why Some Firms Do No Strategic
Planning
Poor reward structures
Fire-fighting
Waste of time
Too expensive
Laziness
Content with success
Why Some Firms Do No Strategic
Planning
Fear of failure
Overconfidence
Prior bad experience
Self-interest
Fear of the unknown
Suspicion
Business Ethics & Strategic
Management
Business Ethics defined –
Principles of conduct within organizations
that guide decision making and behavior
Business Ethics & Strategic
Management