Professional Documents
Culture Documents
The Nature of Strategic Management
The Nature of Strategic Management
Strategic Management:
Concepts & Cases
11th Edition
Fred David
Ch 1 -1
Ch 1 -2
Strategic Management
Defined
Ch 1 -3
Strategic Management
Ch 1 -4
Strategic Management
achieves a firms success
through integration
Management
Marketing
Finance/Accounting
Production/Operations
MIS
Ch 1 -5
Strategy Formulation
Vision & Mission
External Opportunities & Threats
Internal Strengths & Weaknesses
Long-Term Objectives
Alternative Strategies
Strategy Selection
Ch 1 -6
Issues in Strategy
Formulation
New
Newbusiness
business
opportunities
opportunities
Businesses
Businessesto
toabandon
abandon
Allocation
Allocationof
ofresources
resources
Expansion
Expansionor
or
diversification
diversification
International
Internationalmarkets
markets
Mergers
Mergersor
orjoint
jointventures
ventures
Avoidance
Avoidanceof
ofhostile
hostile
takeover
takeover
Ch 1 -7
Strategy Implementation
Annual Objectives
Policies
Employee Motivation
Resource Allocation
Ch 1 -8
Strategy
Implementation
Action
ActionStage
Stageof
ofStrategic
Strategic
Management
Management
Most
Mostdifficult
difficultstage
stage
Mobilization
Mobilizationof
of
employees
employees&&managers
managers
Interpersonal
Interpersonalskills
skills
critical
critical
Consensus
Consensuson
ongoal
goal
pursuit
pursuit
Ch 1 -9
Strategy Evaluation
Internal Review
External Review
Performance Metrics
Corrective Actions
Ch 1 -10
Strategy
Evaluation
Final
FinalStage
Stageof
ofStrategic
Strategic
Management
Management
Subject
Subjectto
tofuture
future
modification
modification
Todays
Todayssuccess
successno
no
guarantee
guaranteeof
offuture
futuresuccess
success
New
New&&different
differentproblems
problems
Complacency
Complacencyleads
leadsto
to
demise
demise
Ch 1 -11
Prime Task of
Strategic Management
Ch 1 -12
Ch 1 -13
Ch 1 -14
Ch 1 -15
Intuitive Thinking
Ch 1 -16
Adapting to Change
Ch 1 -17
Strategic Management is
Gaining and Maintaining
Competitive Advantage
Ch 1 -18
Achieving Sustained
Competitive Advantage
1. Adapting to change in external trends,
internal capabilities and resources
Ch 1 -19
Ch 1 -20
Adapting to Change
Rate & magnitude of change
increasing dramatically
E-commerce
Demographics
Technology
Copyright 2007 Prentice Hall
Ch 1 -21
Adapting to Change
Effective Adaptation
Ch 1 -22
Ch 1 -23
Key Terms
Strategists Firms success/failure
Various Job Titles:
Chief Executive Officer (CEO)
Chief Strategy Officer (CSO)
President
Owner
Board Chair
Executive Director
Copyright 2007 Prentice Hall
Ch 1 -24
Key Terms
Vision Statement
What do we want to become?
Mission Statement
What is our business?
Ch 1 -25
Key Terms
Ch 1 -26
Key Terms
Opportunities & Threats (External)
Analysis of Trends:
Economic
Social
Cultural
Demographic/Environmental
Technological
Competitors
Ch 1 -27
Key Terms
Opportunities & Threats
Environmental Scanning (Industry Analysis)
Ch 1 -28
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
Ch 1 -29
Key Terms
Strengths & Weaknesses (Internal)
Ch 1 -30
Key Terms
Strengths & Weaknesses (Internal)
Typically located in functional areas of the firm
Management
Marketing
Finance/Accounting
Production/Operations
Ch 1 -31
Key Terms
Strengths & Weaknesses
Assessing the Internal Environment
Financial Ratios
Performance Metrics
Internal Factors
Industry Averages
Survey Data
Ch 1 -32
Key Terms
Long-term Objectives
Ch 1 -33
Key Terms
Long-term Objectives
Essential for ensuring the firms success
Provide direction
Aid in evaluation
Create synergy
Focus coordination
Ch 1 -34
Key Terms
Strategies
Ch 1 -35
Key Terms
Strategies
Some Examples
Geographic expansion
Diversification
Acquisition
Market penetration
Retrenchment
Liquidation
Joint venture
Ch 1 -36
Key Terms
Annual Objectives
Ch 1 -37
Key Terms
Policies
Ch 1 -38
Ch 1 -39
Ch 1 -40
Chapter 3
Vision
&
Mission
Chapter 2
Long-Term
Objectives
Generate,
Evaluate,
Select
Strategies
Implement
Strategies:
Mgmt Issues
Implement
Strategies:
Marketing,
Fin/Acct,
R&D, CIS
Measure &
Evaluate
Performance
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Internal
Audit
Chapter 4
Ch 1 -41
Ch 1 -42
Vision
Mission
Objectives
Strategies
Ch 1 -43
Ch 1 -44
Benefits of Strategic
Management
Proactive in shaping firms future
Ch 1 -45
Benefits of Strategic
Management
Financial Benefits
Improvement in sales
Improvement in profitability
Productivity improvement
Ch 1 -46
Benefits of Strategic
Management
Non-Financial Benefits
Improved understanding of competitors strategies
Enhanced awareness of threats
Reduced resistance to change
Enhanced problem-prevention capabilities
Ch 1 -47
Benefits of Strategic
Management (Greenley)
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
Ch 1 -48
Benefits of Strategic
Management (Greenley contd)
6. Effective allocation of time & resources
7. Internal communication among personnel
8. Integration of individual behaviors
9. Clarify individual responsibilities
10. Encourage forward thinking
Ch 1 -49
Benefits of Strategic
Management (Greenley contd)
11. Encourages
change
12. Provides
Ch 1 -50
Ch 1 -51
Ch 1 -52
Ch 1 -53
Ch 1 -54
Ch 1 -55
Misleading advertising
Misleading labeling
Harm to the environment
Insider trading
Dumping flawed products on foreign markets
Poor product or service safety
Padding expense accounts
Ch 1 -56
Natural Environment
Perspective
ISO used to gain strategic advantage
Ch 1 -57
Natural Environment
Perspective
ISO 14000 standards
Voluntary standards
ISO 14001 standard for Environmental
Management System
Firms minimize harmful effects on
environment
Ch 1 -58
Parent company
Host country
Ch 1 -59
Cultural differences
Norms
Values
Work ethic
Ch 1 -60
Advantages of International
Operations
Absorb excess capacity
Reduce unit costs
Spread risk over wider markets
Low-cost production facilities
Ch 1 -61
Advantages of International
Operations (contd)
Ch 1 -62
Disadvantages of
International Operations
Difficult communications
Underestimate foreign competition
Cultural barriers to effective management
Complications arising from currency
differences
Copyright 2007 Prentice Hall
Ch 1 -63