Overview of Strategic

Management

Overview
Why do some firms succeed while others fail?
A central objective of strategic management is to learn
why this happens.

What is strategy?
An action a company takes to attain superior
performance.

What is the strategic management process?

The process by which managers choose a set of
strategies for the enterprise to pursue its vision.

Company
Experiences,
Know-how,
Resource
Strengths and
Weaknesses,
and
Competitive
Capabilities

Aba

ra
t
s
d
e
ndon

res
u
t
a
e
f
t egy
Planned Stra
tegy

New initiative
s plus ongoin
g
strategy featu
res continued
from
prior periods

Actual Company
Strategy

ging
n
a
h
c
s to
n
o
i
t
c
a
e re
v
i
t
p
a
d
A
nces
a
t
s
m
u
circ
e Stra
Reactiv

tegy

A Companys Strategy is Partly Planned

and Partly Reactive

Social,
political,
regulatory and
community
factors

Competitive
conditions and
industry
attractiveness

Company
opportunities
and threats to
companys
well-being

Companys Strategic Situation

Resource
strengths,
capabilities,
and
weaknesses

Influences of
key executives

Shared values
and company
culture

External Factors

Determine
relevance
of internal
and
external
factors

Identify and
evaluate
alternatives

Craft
the
strategy

Internal Factors

Factors Shaping the Choice of Company

Strategy

Strategy as an Emergent Process

Strategy making in an unpredictable world
Creates the necessity for flexible strategic approaches.

Strategy making by lower-level managers

Strategy evolves through autonomous action.

Serendipity and strategy

Accidental discoveries and happenstances can have
dramatic effects on strategic direction.

Intended and emergent strategies

Realized strategies are combinations of intended and
emergent strategies.

Why Do Strategies Evolve?

A companys strategy is a work in progress
Changes may be necessary to react to

Shifting market conditions

Technological breakthroughs
Fresh moves of competitors
Evolving customer preferences
Emerging market opportunities
New ideas to improve strategy
Crisis situations

Strategic Management
Set of decisions and actions that result to the
formulation and implementation of plans
designed to achieve a companys objectives
Study of why and how some firms
outperform others

Benefits of Strategic
Management

Strategy formulation activities enhance the

firms ability to prevent problems.
Group-based strategic decisions are likely to be
drawn from the best available alternatives.
The involvement of employees in strategy
formulation improves their understanding of the
productivity-reward relationship in every
strategic plan and, thus, heightens their
motivation.

 Gaps and overlaps in activities among

individuals and groups are reduced as
participation in strategy formulation
clarifies differences in roles.
Resistance to change is reduced.

Risks of Strategic
Management

The time that managers spend on the strategic

management process may have a negative impact
on operational responsibilities.
If the formulators of strategy are not intimately
involved in its implementation, they may shirk their
individual responsibility for the decision reached.
Strategic managers must be trained to anticipate
and respond to the disappointment of participating
subordinates over unattained expectations.

What is Formality?
The degree to which participation,
responsibility, authority, and discretion in
decision-making are specified in strategic
management.

Entrepreneurial Mode
The informal, intuitive, and limited approach
to strategic management associated with
owner-managers of smaller firms.

Planning Mode
The strategic formality associated with large
firms that operate under a comprehensive,
formal planning system.

Adaptive Mode
The strategic formality associated with
medium-sized firms that emphasize the
incremental modification of existing
competitive approaches.

Key Attributes of Strategic Management

Directs the organization toward overall goals
and objectives
Includes multiple stakeholders in decision
making
Needs to incorporate short-term and longterm perspectives
Recognizes trade-offs between efficiency
and effectiveness

Critical Tasks of Strategic Management

Formulate the companys mission

Conduct internal analysis
Assess the companys external environment
Analyze companys options
Identify most desirable option/s
Select long-term objectives and grand strategies
Develop annual objectives and short-term strategies
Implement the strategic choices
Evaluate success of the strategic process

Dimensions of Strategic Decisions

Strategic issues
require top-management decisions
require large amounts of the firms resources
often affect the firms long-term prosperity
are future oriented
usually have multifunctional or multi-business
consequences
require considering the firms external environment

Task 1
Develop
Vision
and
Mission

Revise as
Needed

Task 2

Task 3

Task 4

Task 5

Set
Goals &
Objectives

Formulate
Strategy
to Achieve
Goals &
Objectives

Implement
and
Execute
Strategy

Monitor,
Evaluate,
and Take
Corrective
Action

Revise as
Needed

Improve/
Change

Improve/
Change

Recycle
as Needed

Develop Mission and Vision

What is a Company Mission?
This is the fundamental purpose that sets a firm
apart from other firms of its type and identifies the
scope of its operations in product and market terms.
It sets out why the organization exists and what it
should be doing.
It broadly outlines the organizations future course
and serves to communicate who we are, what we
do, and where were headed

Coca-Cola Company
Mission
Everything we do is inspired by our enduring
mission:
To Refresh the World... in body, mind, and spirit.
To Inspire Moments of Optimism... through our
brands and our actions.
To Create Value and Make a Difference...
everywhere we engage.

Develop Mission and Vision

What is a Vision?
This is a general statement of the
organizations intended direction that evokes
emotional feelings in organization members.
A strategic vision describes the route a
company intends to take in developing and
strengthening

Coca-Cola Company
Vision
To achieve sustainable growth, we have established a vision
with clear goals.
Profit: Maximizing return to shareowners while being mindful
of our overall responsibilities.
People: Being a great place to work where people are inspired
to be the best they can be.
Portfolio: Bringing to the world a portfolio of beverage brands
that anticipate and satisfy peoples desires and needs.
Partners: Nurturing a winning network of partners and building
mutual loyalty.
Planet: Being a responsible global citizen that makes a
difference.

Linking the Vision with Company Values

Companies often develop a statement of values
to guide a companys pursuit of its vision and
strategy and paint the white lines for how the
companys business is to be conducted
Values statements remain a bunch of nice words
until the espoused beliefs, traits, and behaviors
are incorporated into companys operations and
work practices and are used as the benchmark
for job appraisal, promotions, and rewards.

Coca-Cola Company
Values
We are guided by shared values that we will live by
as a company and as individuals.
Leadership: "The courage to shape a better future"
Passion: "Committed in heart and mind"
Integrity: "Be real"
Accountability: "If it is to be, its up to me"
Collaboration: "Leverage collective genius"
Innovation: "Seek, imagine, create, delight"
Quality: "What we do, we do well"