Chapter 1 Strategic Management Strategic Management The Analyses, decisions, and actions an Organization undertakes in order to create and

d sustain competitive advantages. 4 Key Attributes 1.Directs the organization toward overall goals and objectives 2.Includes multiple stakeholders in decision making 3. Needs to incorporate short and long term Perspectives 4. Recognizes trade-offs between effectiveness and efficiency. Strategic Management Process -Strategy Analysis: Study of firms external and internal environments and their fit with organizational vision and goals. -Strategy Formulation: decisions made by firms regarding investments commitments, and other aspects of operations that create and sustain competitive advantage -Strategy Implementation: actions made by firms that carry out the formulated strategy including strategic controls, organizational design, and leadership Effectiveness: Doing the right thing. Efficiency: Doing things right Ambidexterity: The challenge managers face of both aligning resources to take advantage of existing product markets as well as proactively exploring new opportunities.

that arise among the demands of the various stakeholders as well as the need to endeavor to attain symbiosisthat is, interdependence and mutual benefitamong the various stakeholder groups. Need for consistency between a firms vision, mission, and strategic objectives. Collectively, they form an organizations hierarchy of goals. Visions should evoke powerful and compelling mental images. However, they are not very specific. Strategic objectives, on the other hand, are much more specific and are vital to ensuring that the organization is striving toward fulfilling its vision and mission. Two Perspectives of Leadership 1. 2. 3. Romantic view Leader is the key force in organizations success External control perspective -Focus is on external factors that affect an organizations success -Must be aware of opportunities and threats faced in external environment -Must have thorough understanding of the firms resources and capabilities Chapter 2 SWOT Analysis In the traditional approaches to assessing a firms internal environment, the primary goal of managers would be to determine their firms relative strengths and weaknesses. Such is the role of SWOT analysis, wherein managers analyze their firms strengths and weaknesses as well as the opportunities and threats in the external environment. Value-chain analysis and the resourcebased view of the firm -In conducting a value-chain analysis, first divide the firm into a series of valuecreating activities. These include primary activities such as inbound logistics, operations, and service as well as support activities such as procurement and human resources management. Then analyze how each activity adds value as well as how interrelationships among value activities in the firm and among 1. a. i. 2. a. i. 3. a. b.

the firm and its customers and suppliers add value. Thus, instead of merely determining a firms strengths and weaknesses per se, you analyze them in the overall context of the firm and its relationships with customers and suppliers, the value system.

Managers must analyze the external environment to minimize or eliminate threats and exploit opportunities. This involves a continuous process of environmental scanning and monitoring as well as obtaining competitive intelligence on present and potential rivals. These activities provide valuable inputs for developing forecasts. In addition, many firms use scenario planning to anticipate and respond to volatile and disruptive environmental changes. Topics: Environmental Scanning Surveillance of a firms external environment Predict environmental changes to come, Detect changes already under way, Be Proactive Environmental Monitoring Track evolution of Environmental trends, Sequences of events, Streams of activities Competitive Intelligence Define and understand a firms industry Identify rivals strengths and weaknesses Successful generic strategies invariably enhance a firms position vis--vis the five forces of that industrya point that we stressed and illustrated with examples. However, as we pointed out, there are pitfalls to each of the generic strategies. Thus, the sustainability of a firms advantage is always challenged because of imitation or substitution by new or existing rivals. Such competitor moves erode a firms advantage over time.

The concept of strategic groups is also important to the external environment of a firm. No two organizations are completely different nor are they exactly the same. The question is how to group firms in an industry on the basis of similarities in their resources and strategies. The strategic groups concept is valuable for determining mobility barriers across groups, identifying groups with marginal competitive positions, charting the future directions of firm strategies, and assessing the implications of industry trends for the strategic group as a whole. We identified two types of environment: the general environment and the competitive environment. The six segments of the general environment are demographic, sociocultural, political/legal, technological, economic, and global. Trends and events occurring in these segments, such as the aging of the population, higher percentages of women in the workplace, governmental legislation, and increasing (or decreasing) interest rates, can have a dramatic effect on your firm. A given trend or event may have a positive impact on some industries and a negative or neutral impact or none at all on others. The bargaining power of buyers -It is concentrated or purchases volumes relative to seller sales -The products it purchases from the industry are standard or undifferentiated -The buyer faces few switching costs -It earns low profits -The buyer pose a credible threat of backward integration -The industrys product is unimportant to the quality of the buyers products or services The bargaining power of suppliers -The supplier group is dominated by a few companies and is more concentrated (few firms dominate the industry) than the industry it sells to -The supplier group is not obliged to contend with substitute products for sale to the industry -The industry is not an important customer of the supplier group -The suppliers product s an important input to the buyers business

Role of Corporate Governance -The relationship among various participants in determining the direction and performance of Corporations. The Primary participants are 1. The Shareholders, 2. The management led by the CEO, and 3. The board of directors. Stakeholder Management -a firms strategy for recognizing and responding to the interests of all its salient stakeholders. Five key stakeholders in all organizations: owners, customers, suppliers, employees, and society-at-large. Successful firms go beyond an overriding focus on satisfying solely the interests of owners. Rather, they recognize the inherent conflicts

The competitive environment consists of industry-related factors and has a more direct impact than the general environment. Porters five-forces model of industry analysis includes the threat of new entrants, buyer power, supplier power, threat of substitutes, and rivalry among competitors. The intensity of these factors determines, in large part, the average expected level of profitability in an industry. A sound awareness of such factors, both individually and in combination, is

-The supplier groups products is an are differentiated or has built up switching costs for the buyer -The supplier group poses a credible threat of forward integration Value-chain analysis -Strategic analysis of an organisation that uses value-creating activities -Building block to understand competitive advantage -Primary activities: inbound logistics, operations, outbound logistics , marketing & Sales and service contribution -Secondary activities: Procurement, technology development, human resource management and general administration (adds value (in)directly) -Also taking suppliers and other actors into consideration Chapter 4 Central role of knowledge in todays economy Intellectual capital = Market value Book value Human capital (employees capabilities, knowledge, skills and experience) Social capital (Network of relationship in and outside the company) Explicit knowledge (Knowledge that is codified, documented and easily available) Tacit knowledge (Knowledge that is in the minds of employees, experience) Social networks: Implications for knowledge management and career success -From command to cultivation/coordination (decentralised approach to business models) -Social network analysis: Analysis of pattern among individual interactions -Kind of relationships to encourage depends on contingency -Stable environment > closure, dynamic > bridging (always have both, but look at dominant) -The pattern has an effect on how members of different groups connect to others who: