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Chapter 1
 

Chapter 1

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    Chapter 1 Chapter 1 Presentation Transcript

    • Strategic management Creating competitive advantage S V Horner 2010
    • Who cares?
      • Why should anyone care about the strategic direction of firms?
      • Understand direction of
        • your company, competitors, other companies
      S V Horner 2010
    • Who cares?
      • Integration and coordination
        • Across time and across organization
      • Assess the organization’s performance and adjust to a changing environment
      S V Horner 2010
    • Two perspectives of organizational leadership: Do managers matter?
      • Romantic (or internal): Organizational leader as key force in determining organizational success or failure
        • Success creates CEO superheroes
        • Failure creates CEO scapegoats
      S V Horner 2010
    • Two perspectives of organizational leadership
      • External factors: changes in external factors
        • Shifts in customer tastes, preferences
        • International competition
        • Rising material costs
        • Price erosion
      • External conditions determine contexts in which organizational leaders create or lose organizational value
      S V Horner 2010
    • Strategic management process S V Horner 2010
    • Strategic management
      • Analyses, decisions, and actions for creating and sustaining competitive advantage
      S V Horner 2010
    • Analysis
      • Analysis of strategic inputs
      • Internal and external environment
      • Strategic goals: vision, mission, objectives
      S V Horner 2010
    • Decisions
      • Two broad decisions of strategic management
        • Industries in which to compete
        • How to compete in those industries
      • Encompasses both domestic and international operations
      S V Horner 2010
    • Actions
      • Resource allocation: where to focus resources
      • Organizational design: how to group people and tasks
      S V Horner 2010
    • Competitive advantage
      • Some firms outperform others over a long period
      • Competitive advantage with respect to the marketplace
        • Meeting present and future demand
        • Doing so in ways that customers regard as unique and valuable and that competitors find difficult to im itate or substitute
      S V Horner 2010
    • 4 key attributes of strategic management
      • Directed at overall organizational goals
      • Includes multiple stakeholders
      • Incorporates short-term and long-term perspectives
      • Recognizes trade-offs between effectiveness and efficiency
      S V Horner 2010
    • Three major steps of the strategic management processes
      • Strategy analysis
      • Strategy formulation (decisions)
      • Strategy implementation (actions)
      S V Horner 2010
    • Strategy analysis
      • Understanding conditions in external environment
        • Opportunities for creating value
        • Threats to competitive advantage
      • Understand firm strengths and weaknesses
        • Activities in value chain (click on the link)
        • Firm’s resource base
      S V Horner 2010
    • Strategy formulation (decisions)
      • Competing in specific product markets
        • Cost leadership or differentiation
        • Maintain advantage through different stages of industry life cycle
      • Business portfolio
        • Choosing the business(es) in which to compete
        • Creating synergies among businesses
      S V Horner 2010
    • International strategy
      • Modes of entry
      • Creating and sustaining competitive advantage internationally
      S V Horner 2010
    • Strategy implementation (actions)
      • Corporate governance
      • Organizational design
      S V Horner 2010
    • Corporate governance
      • Systems that ensure managers operate in shareholders’ interests
      • Internal control: Primary participants
        • Shareholders
        • Strategic managers
        • Board of directors
      • External control: financial markets, regulators, press
      S V Horner 2010
    • Organizational stakeholders
      • Capital markets
        • Owners (shareholders)
        • Lenders
      • Product markets
        • Suppliers (goods, services, capital, labor)
        • Customers
        • Community
      • Organization: Employees and managers
      S V Horner 2010
    • Corporate social responsibility
      • Firm as citizen
      • Customers evaluate both a firm’s products/services and its practices in producing those products
      • Business involves environmental and social considerations in addition to economic ones
      • Social innovation: society’s needs may create business opportunities
      S V Horner 2010
    • Organizational design
      • Structures consistent with strategy
      • Organizational forms
      S V Horner 2010
    • Key drivers of strategy
      • Globalization: flow of goods, services, capital, people, information, knowledge across borders
      • Technology: new knowledge about products and production and distribution
      • Intellectual capital: human knowledge as source of competitive advantage
      S V Horner 2010
    • Coherence in strategic direction
      • Goal hierarchy
        • Vision: destination driven by passion
        • Mission
          • Statement purpose and basis of competition
          • Communicates to stakeholders
          • Value-focused
        • Objectives: yardstick for measuring goal attainment
      • Each must be consistent with one another
      S V Horner 2010
    • Summary
      • Strategic management
        • Firm direction for creating and sustaining competitive advantage
        • Encompasses entire organization and its internal and external participants
      • Three major steps: analysis, decisions, actions
      S V Horner 2010
    • Summary (cont’d)
      • Forms of external control
        • Corporate governance systems
        • Stakeholders
      • Key drivers of strategy: globalization, technology, intellectual capital
      • Consistency among goal hierarchy
      S V Horner 2010