presented By:

ASAD BASHIR

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 Strategic Management and
Entrepreneurship
• Strategy
A comprehensive plan of action that sets
critical direction for an organization and
guides the allocation of its resources.
• Strategic Management
The process of formulating and
implementing strategies.
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 Five Strategic Management
Tasks
• Identify organizational mission and objectives.
What are we….what do we want to be……

• Assess current performance vis-à-vis mission

and objectives.
How are we doing…...

• Create strategic plans to accomplish purpose

and objectives.
How can we get where we want to be…..
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 Five Strategic Management
Tasks
• Implement the strategic plans.
Has everything been done that needs to be done….

• Evaluate results; change strategic plans and/or

implementation processes as necessary.
Are things working out as planned, and what can
be improved upon…...

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 The Strategic Management
Process
• Strategy Formulation
– Analysis of the Mission (Purpose)
– Analysis of Values (Corp Culture)
– Analysis of the Organization (S&W)
– Analysis of the Environment (O&T)

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 Analysis of the Mission

• Usually expressed in the form of a

Mission Statement in which it
identifies the organization’s official
objectives, and it defines the
Domain in which the organization
intends to operate such as:
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 Analysis of the Mission
– the Customer it intends to serve.
– the Products and/or Services to
be provided.
– the Location in which it intends
to operate.
– the Philosophy that will guide
the employees.
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 Analysis of the Mission

• Strategic Constituencies
Analysis
What is the organization’s
commitment to it’s stakeholders:
Employees, Stockholders,
Suppliers, Creditors, Communities
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 Analysis of Core Values

•Values
The broad based beliefs about what
is or is not appropriate.

•Corporate Culture
The predominate value system for
the organization.
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 Analysis of Core Values
• Through corporate cultures, the
values of managers and other
individuals are shaped and
pointed in common directions.
• It defines the character of an
organization to both itself and its
external stakeholders.
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 Analysis of Objectives
• Operating Objectives
– Direct activities toward key and
specific results.
– Shorter term targets against which
actual performance results can be
measured as indicators of progress
and continuous improvement.
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 Analysis of Objectives
Operating Objectives
– Profitability – Social
– Market Standing Responsibility

– Human Resources – Cost Efficiency

– Quality – Financial
Resources
– Innovation
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Analysis of the Organization
(SWOT)
Internal Assessment of the Organization
Strengths? Weaknesses?
• Mfg’ing Efficiency
• Outdated Facilities
• Skilled Workforce
• Good Market Share • Inadequate R&D
• Strong Financing • Obsolete Tech
• Superior Reputation • Weak Management
• Past Planning Failures
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Analysis of the Organization
(SWOT)
External Assessment of the Environment
Opportunities? Threats?
• New Markets
• New Competition
• Strong Economy
• Weak Rivals • Shortage of Resources
• Emerging Tech. • Changing Mkt Taste
• Growth of Market • New Regulations
• Substitute Products
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 Levels Of Strategy
• Corporate
Sets the overall strategic direction.
• Business
Sets the strategic direction for a single division
or strategic business unit (SBU).
• Functional
Sets functional directions for supporting
business and corporate strategies. A strategy
that guides activities within specific functional
areas.
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 Types of Strategies
• Growth Strategy
– Seeking greater size and the expansion
of current operations.
This objective can be pursued in a
number of different ways through two
basic strategies:

Concentration and Diversification

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 Types of Strategies
• Retrenchment
– Sometimes called defensive strategies,
involves decisions to reduce operations
and cut back in order to gain
efficiencies and improve performance.

There are three basic approaches:

Turnaround - Divestiture
Liquidation
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 Types of Strategies
• Stability
– Maintains the present course of action
without commitment to any major
operating changes.

– Typically pursued when an organization

is doing well in a receptive environment,
when low risk is important ….. and/or
when time is needed to consolidate
strengths …….
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 Types of Strategies
• Combination Strategies
– Simultaneously employs more than one
of the other strategies.
– This often reflects different strategic
approaches among subsystems.

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 Strategy Formulation Models

• Portfolio Planning
– Seeks the best mix of investments among
alternative business opportunities.
– It is most useful for addressing
corporate-level strategy in multibusiness
or multiproduct situations.

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 Strategy Formulation Models

• The BCG Matrix

– A Portfolio planning approach offered
by the Boston Consulting Group.
– It ties strategy formulation to an
analysis of business opportunities
according to Market Growth Rate and
Market Share.
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 Strategy Formulation Models
• The BCG Matrix
– It ties strategy formulation to four
possible business states:
– Stars - High share/high growth
– Cash Cows - High share/low growth
– Question Marks - Low share/high
growth
– Dogs - Low share/low growth
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 Strategy Formulation Models

• Porter's Competitive Strategies

– This approach begins with an analysis
of an organization's competitive
environment.
– He identifies five strategic forces
affecting industry competition:
Customers - Suppliers - New Entrants
Substitute Products - Industry Competitors
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 Strategy Formulation Models

• Porter's Competitive Strategies

– Next Porter identifies three generic
strategies that organizations may pursue to
gain strategic advantage:

Product Differentiation

Cost Leadership

Focus
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 Strategy Formulation Models
• The Adaptive Model
Organizations should pursue product/market
strategies that are congruent with the nature
of their external environments.
– Prospector Strategies - Taking risk, seeking
opportunities, innovation, and growth.
– Defender Strategy - Avoiding change, seeking
stability and perhaps retrenchment.

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Strategy Formulation Models

– Analyzer Strategy - Maintaining

stability, while exploring limited
innovation.
– Reactor Strategy - Responding to
events, but without a guiding
strategy.

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Strategy Formulation Models

• Product Life Cycles

A series of stages a product or service goes
through in the life of it marketability.
– Introduction
– Growth
– Maturity
– Decline
Suggests that different business
strategies should be used to support
products in different stages of their life.
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 Strategy Implementation
The Incremental-Emergent View
• Not all strategies are clearly formulated at
one point in time and then implemented
step-by-step.

• They take shape, change, and develop over

time as modest adjustments to past
patterns.

• It is called Logical Incrementalism in which

incremental changes in strategy occur as
managers learn from experience.
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 Strategy Implementation
• Strategic Planning Pitfalls
• Failures of Substance
Reflects a lack of attention to the major strategic
planning elements.
• Failure of Process
Reflects poor handling of the ways in which the
various aspects of strategic planning were
accomplished.

•Insufficient Participation Error

•Goal Displacement 29
 The Nature of
Entrepreneurship
A term used to describe risk-
taking behavior that results in the
creation of new opportunities for
individuals and/or organizations.

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Typical Characteristics of
Entrepreneurs
• Internal Locus of Control
• High Need for Achievement
• Tolerance for Ambiguity
• Self-Confidence
• Action-Oriented

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 Entrepreneurs
• Businesses depend on entrepreneurial
managers willing to assume risk and
encourage the creativity and
innovation so important to continued
success.

– Intrapreneurship
– Skunk works
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