THE NATURE OF

STRATEGIC
MANAGEMENT
CRISTINA H. LOBO - CBMEC SM
LEARNING OBJECTIVES
DEFINE AND GIVE EXAMPLES OF
01 DESCRIBE THE STRATEGIC-
MANAGEMENT PROCESS. 04 KEY TERMS IN STRATEGIC
MANAGEMENT.
DISCUSS THE THREE STAGES OF

02 STRATEGY FORMULATION,
IMPLEMENTATION, AND EVALUATION 05
ILLUSTRATE THE COMPREHENSIVE
STRATEGIC-MANAGEMENT MODEL.
ACTIVITIES.

EXPLAIN THE NEED FOR INTEGRATING DESCRIBE THE BENEFITS OF

03 ANALYSIS AND INTUITION IN STRATEGIC
MANAGEMENT.
06 ENGAGING IN STRATEGIC
MANAGEMENT.
LEARNING OBJECTIVES
07 EXPLAIN WHY SOME FIRMS DO
NO STRATEGIC PLANNING.

DESCRIBE THE PITFALLS IN

08 ACTUALLY DOING STRATEGIC
PLANNING.

09 DISCUSS THE CONNECTION BETWEEN

BUSINESS AND MILITARY STRATEGY.
STRATEGIC MANAGEMENT
the art and science of formulating,
implementing, and evaluating cross-
functional decisions that enable an
organization to achieve its objectives
STRATEGIC
MANAGEMENT
Strategic management is
used synonymously with the
term strategic planning in
this course.
Sometimes the term strategic
management is used to refer to
strategy formulation,
implementation, and evaluation,
with strategic planning referring
only to strategy formulation.
STRATEGIC
MANAGEMENT
A strategic plan results from
tough managerial choices
among numerous good
A strategic plan is a alternatives, and it signals
company’s game plan. commitment to specific markets,
policies, procedures, and
operations.
STAGES OF
STRATEGIC
MANAGEMENT 1.
Strategy formulation
2.
Strategy implementation 3.
Strategy evaluation
STRATEGY FORMULATION
DEVELOPING A VISION
01 AND MISSION 04 ESTABLISHING LONG-
TERM OBJECTIVES

IDENTIFYING AN
GENERATING ALTERNATIVE
02 ORGANIZATION’S EXTERNAL
OPPORTUNITIES AND THREATS
05 STRATEGIES
DETERMINING INTERNAL
CHOOSING PARTICULAR
03 STRENGTHS AND 06 STRATEGIES TO PURSUE
WEAKNESSES
WHAT NEW BUSINESSES TO ENTER
WHAT BUSINESSES TO ABANDON
WHETHER TO EXPAND OPERATIONS OR
DIVERSIFY
WHETHER TO ENTER INTERNATIONAL
MARKETS
WHETHER TO MERGE OR FORM A JOINT
VENTURE
HOW TO AVOID A HOSTILE TAKEOVER
www.reallygreatsite.com
STRATEGY IMPLEMENTATION
REQUIRES A FIRM TO ESTABLISH ANNUAL
01 OBJECTIVES, DEVISE POLICIES, MOTIVATE
EMPLOYEES, AND ALLOCATE RESOURCES SO THAT
FORMULATED STRATEGIES CAN BE EXECUTED
02 OFTEN CALLED THE ACTION STAGE
STRATEGY EVALUATION
01 DETERMINING WHICH STRATEGIES ARE NOT
WORKING WELL

02 THREE FUNDAMENTAL ACTIVITIES

REVIEWING EXTERNAL AND INTERNAL FACTORS THAT ARE THE
BASES FOR CURRENT STRATEGIES
MEASURING PERFORMANCE
TAKING CORRECTIVE ACTIONS
 KEY TERMS IN STRATEGIC
MANAGEMENT

1 2 3 4
COMPETITIVE ADVANTAGE STRATEGISTS VISION AND MISSION EXTERNAL OPPORTUNITIES AND
STATEMENTS THREATS
any activity a firm does especially
well compared to activities done by
Individuals most responsible for the A vision statement answers the economic, social, cultural, demographic,
rival firms,
success or failure of an question “What do we want to environmental, political, legal,
any resource a firm possesses that
organization become?” governmental, technological, and
rival firms desire.
Help an organization gather, A mission statement answers the competitive trends and events that could
A firm must strive to achieve
analyze, and organize information question “What is our business?” significantly benefit or harm an organization
sustained competitive advantage
 KEY TERMS IN STRATEGIC
MANAGEMENT

1 2
INTERNAL STRENGTHS AND
INTERNAL WEAKNESSES
an organization’s controllable
activities that are performed
especially well or poorly
determined relative to competitors
LONG-TERM OBJECTIVES
specific results that an organization
seeks to achieve in pursuing its basic
mission
long-term means more than one year
should be challenging, measurable,
consistent, reasonable, and clear
3 4
STRATEGIES
the means by which long-term
objectives will be achieved
may include geographic
expansion, diversification,
acquisition, product development,
market penetration, retrenchment,
divestiture, liquidation, and joint
ventures
ANNUAL OBJECTIVES
short-term milestones that organizations
must achieve to reach long-term objectives
should be measurable, quantitative,
challenging, realistic, consistent, and
prioritized
should be established at the corporate,
divisional, and functional levels in a large
organization
 THE STRATEGIC-MANAGEMENT MODEL
Where do How are we
Where are
we want to going to get
we now?
go? there?
COMPREHENSIVE STRATEGIC-
MANAGEMENT MODEL
BENEFITS OF STRATEGIC
MANAGEMENT
Strategic management allows
an organization to be more
proactive than reactive in
shaping its own future;
It allows an organization to
initiate and influence (rather than
just respond to) activities—and
thus to exert control over its own
destiny
BENEFITS TO A FIRM THAT DOES
STRATEGIC PLANNING
FINANCIAL
BENEFITS
Businesses using strategic-management concepts show
significant improvement in sales, profitability, and productivity
compared to firms without systematic planning activities

High-performing firms tend to do systematic planning to prepare

for future fluctuations in their external and internal environments
NONFINANCIAL
BENEFITS
Enhanced awareness of external threats
Improved understanding of competitors’ strategies
Increased employee productivity
Reduced resistance to change
Clearer understanding of performance–reward relationships
WHY SOME FIRMS DO NO
STRATEGIC PLANNING

NO
PUNISHMENT
FOR NOT
NO UNDERSTANDING PLANNING
OF OR
APPRECIATION FOR
THE BENEFITS OF
PLANNING
NO FORMAL
TRAINING IN
STRATEGIC
NO MONETARY
MANAGEMENT REWARDS FOR
DOING PLANNING
WHY SOME FIRMS DO NO
STRATEGIC PLANNING

CONTENT WITH CURRENT

SUCCESS; FAILURE TO
REALIZE THAT SUCCESS
VIEW PLANNING AS TODAY IS NO GUARANTEE
A WASTE OF TIME, FOR SUCCESS TOMORROW;
SINCE NO EVEN APPLE INC. IS AN
PRODUCT/SERVICE EXAMPLE
TOO BUSY IS MADE

“FIREFIGHTING”
(RESOLVING
LAZINESS; EFFECTIVE
INTERNAL CRISES) PLANNING TAKES
TO PLAN AHEAD TIME AND EFFORT;
TIME IS MONEY
WHY SOME FIRMS DO NO
STRATEGIC PLANNING

OVERCONFIDENT
PRIOR BAD
EXPERIENCE WITH
STRATEGIC
PLANNING DONE
SOMETIME/SOMEWH
ERE
PITFALLS IN STRATEGIC PLANNING
USING STRATEGIC PLANNING
01 TO GAIN CONTROL OVER
DECISIONS AND RESOURCES
04
DOING STRATEGIC PLANNING
02 ONLY TO SATISFY
ACCREDITATION OR 05
REGULATORY REQUIREMENTS
TOO HASTILY MOVING FROM
03 MISSION DEVELOPMENT TO
STRATEGY FORMULATION
06
FAILING TO COMMUNICATE THE
PLAN TO EMPLOYEES, WHO
CONTINUE WORKING IN THE DARK
TOP MANAGERS MAKING MANY
INTUITIVE DECISIONS THAT
CONFLICT WITH THE FORMAL
PLAN
TOP MANAGERS NOT ACTIVELY
SUPPORTING THE STRATEGIC-
PLANNING PROCESS
PITFALLS IN STRATEGIC PLANNING
FAILING TO USE PLANS AS A FAILING TO CREATE A
07 STANDARD FOR MEASURING
PERFORMANCE
10 COLLABORATIVE CLIMATE
SUPPORTIVE OF CHANGE

DELEGATING PLANNING TO A
08 “PLANNER” RATHER THAN
INVOLVING ALL MANAGERS
11 VIEWING PLANNING AS
UNNECESSARY OR UNIMPORTANT

BECOMING SO ENGROSSED IN
FAILING TO INVOLVE KEY
CURRENT PROBLEMS THAT
09 EMPLOYEES IN ALL PHASES OF
PLANNING
12 INSUFFICIENT OR NO PLANNING
IS DONE
 CRISTINA H. LOBO

THANK YOU! CBMEC SM

 WHY IS STRATEGIC
MANAGEMENT
IMPORTANT?
To be submitted on Tuesday (09/05/2023)
Yellow Paper