Strategic Management

(Lecture 1)

Dr. Ahmed Azmy

•Learning Objectives: -
•After reading this chapter, you should be able to:
 Understand the benefits of strategic management.
 Explain how globalization and environmental sustainability influence
strategic management.
 Understand the basic model of strategic management and its
components.
Strategic Management
Contents …
 Strategic Management – Concept and definition.
 Difference between Strategic Planning and other Planning.
 Corporate Governance.
 Strategic Management Model.
 Environmental Scanning (External and Internal factors).
 SWOT Analysis.
 Strategies in Action.
 Effective strategy formulation (Vision / Mission /
Objectives/Strategy/Policy).
 Strategy implementation.
 Types of strategies (Functional Strategy).
 Evaluation and control.
 Case Analysis.
Strategic Management
Definition and Concept
Strategic Management
What?
 Is a set of managerial decisions and actions that
Why? determines the long-run performance of a
corporation
Who?
Strategy
When?
 A strategy is a course of action. (Co’s(assist)) game
How ? Plan)
 Framework for managerial decisions
 The co’s long-term plan of how it will balance its:
o Internal factors
o External factors
to maintain a competitive advantage
Strategic Management
Definition and Concept
Strategic management can begin with few
What?
simple questions:
Why? 1. Where is the organization now? (Not where do
we hope it is)
Who?
2. If no changes are made, where will the
When? organization be in 5 years ? 8 years ? 10 years ?
Are the answers acceptable?
How ? 3. If the answers are not acceptable, what
specific actions should management
undertake? What are the risks and payoffs
involved ?
Strategic Management
Definition and Concept

What? 3 • How will we get there? (strategic plan)

• How are we doing? (Are we there yet?)
4
Why?

Who?
the the
tension
When? actual possible
How ?
what is ”as now” what could be ”as if”
status quo stability change transition
1 • Where are 2 • Where do we want to
we now? go in ____ years?
Strategic Management
Strategic Decision Making
What makes a decision Strategic?
What?
Strategic decision has three characteristics:
Why?
1. Rare: Strategic decisions are unusual and
Who? typically have no precedent to follow.

When?
2. Consequential: Strategic decisions manage
the organization resources and demand a
How ? great commitment from people at all levels.
3. Directive: Strategic decisions set precedents
for lesser decisions and future actions
throughout an organization.
Strategic Management
Strategic Decision Making
Who makes a decision Strategic?
What?
 Some strategic decisions are made in a flash by
Why? one person (often an entrepreneur or a
powerful CEO) who has a brilliant insight and is
Who?
quickly able to convince others to adopt his or
When? her idea.
How ?
 Other strategic decisions seem to develop out
of a series of small incremental choices that
over time push an organization more in one
direction than another.
Strategic Management
Strategic Decision Making
Who makes a decision Strategic?
What?
 Corporate headquarters established the mission
Why? and objectives but allowed the business units to
propose strategies to achieve them
Who?

When?

How ?
Strategic Management
Benefits of Strategic Management
 Improved understanding of
What?
a rapidly changing
Why? environment

Who?
 Required resources
When? allocation include assets,
budget, workforce …etc
How ?
Strategic Management
Benefits of Strategic Management
Strategic Management Principle
What?

Why? Effective strategy-

Who? making begins with
When? a vision of where
How ? the organization
needs to head!
Strategic Management
Who do Strategic Management?
Corporate Governance
What? Refers to the
relationship among:
Why?
The board of
Who? directors
Top management
When?

To
Shareholders

p
tor

Ma
c
How ?

ire

na
in determining the

ge
of

me
direction and

ard

nt
Bo
performance of the
corporation
Shareholders
Who is on the board of directors?

• Chairman of the board

• Inside board members

 Chief Executive officer (CEO)
 Chief Operating officer (COO)
 Chief Financial officer (CFO)
 Chief Information officer

• Outside board members

Strategic Management
Who does strategy?
Roles and responsibilities of the BoD
What?

Why? 1. Setting corporate strategy

Who? 2. Hiring & firing CEO and Top Management
3. Controlling, monitoring, and supervising Top
When?
Management
How ? 4. Reviewing and approving use of resources
Strategic Management
Who does strategy?
Roles and responsibilities of the Top
What?
Management
Why? 1. Provide effective leadership and strategic vision
Who? 2. Responsible for decisions and action of every
employee
When?
 Implement— put the strategies into action
How ? and monitor performance
 Evaluate—do the actual evaluations and take
necessary actions
Strategic Management
Who read Strategic Management?

What? 1- Bank Manager

Why?
2- Investors
Who?

When?
3- Yourself and managers
How ?
who will be running the
business
Strategic Management
When Strategic Management is done?
1- Starting new business
What?

Why? 2- Buying already established business

Who? 3- New vision of the organization
When?
4-Need for finance
How ?
Strategic Management
How Strategic Management is done?

What? Environmental Strategy Strategy Evaluation

Scanning Formulation Implementation & Control

Why?

Who?

When?

How ?
Strategic Management Model
Environmental Evaluation
Strategy Formulation Strategy Implementation
Scanning & Control

External
Vision
Societal
Environment Mission
What
(General forces) do we Objectives
PEST Analysis want Reason
Task (Industry) to be for Strategy
Competitors existence What
results to Policy
Plan to
Internal accomplish achieve
Program
Structure: the Broad
Chain of Command mission guidelines Budget
& for Activities
Culture:
objectives decision needed Procedure
Beliefs, Cost of
making to
Expectations,
accomplish the Performance
Values programs Sequence
a plan
Resources: of steps
Assets, skills, needed Actual
competencies, to do the Performance
knowledge job