Introduction to Strategic Management

Successfully formulate and implement value-creating

strategy
Based on (sustainable) competitive advantage
To earn above-average returns
To create value for stakeholders

Introduction to Strategic Management

Strategic Management Process
Strategic Inputs: Internal and External Scanning
Strategic Actions: Formulation and implementation
of strategy
Strategic Outcomes: Above, at or below average
returns

Introduction to Strategic Management

From Organizational Vision to Tactical Steps
Define the Organization:
Vision
Mission Statement

Understand the Operating Environment

External Environment (Threats and Opportunities)
Internal Conditions (Strengths and Weaknesses)

Determine Strategic Alternatives

Formulate Strategy (long term)
Implement Strategy through Tactics (short term)

Introduction to Strategic Management

SWOT Analysis
External Analysis
EFAS Matrix
(Chapter 3)
Internal Analysis IFAS Matrix
(Chapter 4)

Strategy
Formulation
Alternative
Strategies
TOWS Matrix
(Chapter 5)
Corporate
Strategy
(Chapter 6)
Functional
Strategy
(Chapter 7)

Strategy
Implementation
Organizing
(Chapter 8)
Staffing
(Chapter 9)
Evaluating
(Chapter 10)

Introduction to Strategic Management

The New Competitive Landscape
The Global Economy
Movement of goods, services, capital/financing,
technology and innovation, information, and
people across borders

Introduction to Strategic Management

The New Competitive Landscape
The Global Economy
Competitive Implications
Managing supply and logistics (raw materials,
components manufacturing, assembly,
distribution)
Adaptation-standardization decisions in
management practices and marketing programs

Introduction to Strategic Management

The New Competitive Landscape
Technology and Technological Change
Increasing Rate of Change
Increasing Rate of Diffusion
Competitive Implications
Impact of Technology Convergence.
Application of Nanotechnology.

Introduction to Strategic Management

The New Competitive Landscape
Information Intensity
Declining costs
Increasing accessibility
Knowledge Intensity (Information, Intelligence,
Expertise)
Increasing proportion of shareholder value
Strategic Flexibility, Capacity to Learn & Reorient

Introduction to Strategic Management

The New Competitive Landscape
Information and Knowledge Intensity
Competitive Implications
Knowledge management systems (SAP)
Control versus flexibility (strategic alliances)

Introduction to Strategic Management

Mission of Firm
Clearly articulate 3-5 year plan of firm
Identify:
The industry(ies) it wishes to participate in
How it wishes to participate
Marketing mix (product, price, place, promotion
Customer wants and needs it will serve
Position it will hold in its chosen markets

Introduction to Strategic Management

Mission is:
What is the ultimate accomplishment goal for the
firm?
Usually stated in the eyes of the customers and key
stakeholders
How it is achieved (core competencies of the firm)

Introduction to Strategic Management

Examples of Vision and Mission Statements
Vision: S C Johnson
Mission Statement: Proctor & Gamble
Dilberts Mission Statement Generator

Introduction to Strategic Management

What leads to a formulating a new strategy?

New CEO
External intervention

Triggering
events

Threat of change in
ownership
Performance gap
Strategic inflection point

Stimulus
for change
in
strategy

Introduction to Strategic Management

Strategy: Levels and Dynamics
Corporate: general perspective towards growth
and management of various business units,
product lines, functional areas
Business: Strategic Business Units (SBUs), focus
on improvement of competitive position of
products and services
Functional: focus on marketing, R & D, etc. to
achieve SBU and overall corporate objectives.

Introduction to Strategic Management

Corporate goals and objectives

include:
Profitability (net profits)
Growth (increase in total assets, etc.)
Utilization of resources (ROE or ROI)
Market leadership (market share)

Introduction to Strategic Management

Intended Strategy

Deliberate
Strategy
Realized
Strategy

Unrealized
Strategy

Emergent
Strategy

Introduction to Strategic Management

The Importance of Stakeholders
Capital Market Stakeholders - shareholders and major
suppliers of firms capital
Product Market Stakeholders - primary customers,
suppliers, host communities, and unions
Organizational Stakeholders - employees (managerial and
non-managerial)
Societal Stakeholders - environmental and social
responsibility organizations

Governments

Employees

Investors,
Shareholders and
Lenders

Supply Chain
Associates

Private Organizations

THE CORPORATION

Local Communities
and Citizens

Customers and Users

Unions

Joint Venture
partners and
Alliances

Regulatory
Authorities

Governments

Joint Venture
partners
& Alliances

Supply Chain
Associates

Investors: Shareowners & Lenders

Employees

Unions

Local communities
& Citizens

CORPORATION

Customers
& Users

Regulatory
Authorities

RESOURCE BASE

INDUSTRY STRUCTURE

SOCIAL POLITICAL ARENA

Private
Organizations

Community
Relations
Frankenstein
Foods

GMOs
Strategic
alliances

EU Approvals;
Import licenses

Suppliers
Investors
Employees:
- US
- Global
EPA
regulations

Greenpeace

MONSANTO

Customers:
- Domestic
- Global

Global
Joint
ventures

RESOURCE BASE

INDUSTRY STRUCTURE

SOCIAL POLITICAL ARENA

Environmental
Issues