Strategic Management
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  • 1. Knowledge Objectives
    • Define the term strategic management and explain components of strategy formulation and implementation
    • Understand synergy and identify examples
    • Describe generic competitive strategies.
    • Explain the nature and purpose of SWOT analysis.
  • 2. Understanding Strategic Management
    • Strategic view helps frame decision making for other managers
    • Employees who think in strategic terms understand top management rationales
    • Trend is toward greater teamwork and cooperation throughout the planning cycle
  • 3. Strategic Management = Strategic Planning + Implementation + Control
    • Strategic Management
      • Creating a fit between the organization and its changing environment.
        • Includes budget control, long-range planning, and strategic planning.
        • Merges strategic planning, implementation, and control to create a dynamic process.
  • 4.
    • Strategy
      • An integrated externally-oriented perception of how to achieve the organization’s mission.
    • Strategic Planning
      • The process of determining how to pursue the organization’s long-term goals with resources expected to be available.
    Strategic Management = Strategic Planning + Implementation + Control (cont’d)
  • 5. Thinking Strategically
    • Synergy
      • The whole is greater than the sum of the parts
    • Types of synergy
      • Market: extending products to new markets.
      • Cost: savings from combinations of common-base operations, resources, and facilities (scope economies).
      • Technological: the transfer and application of technologies to new markets.
  • 6. The Strategic Management Process
    • Steps in the Strategic Management Process
      • Formulate overall strategy
      • Formulate supporting strategic objectives
      • Make implementation decisions
      • Establish control systems
  • 7. Porter’s Generic Competitive Strategies
    • Model’s Competitive Variables
      • 1. How to compete (cost vs. being unique)
      • 2. How broad is the target market
    • Cost Leadership Strategy
      • Lowest cost structure position - provides advantages in pricing, supplier negotiation
    • Differentiation Strategy
      • Unique/superior value position - provides brand loyalty.
  • 8. Porter’s Generic Competitive Strategies (cont’d)
    • Focus Strategies
      • Variations on cost/differentiation but with a focus on narrow or regional market segment
  • 9. Forecasting Techniques
    • Scenario analysis
      • Preparing written descriptions of alternative but equally likely future situations.
        • Longitudinal scenarios: describing how the future situations will evolve from the present.
        • Cross-sectional scenarios: describing future situations at a given point in time.
  • 10. Thinking Strategically
    • The “Internet” World
      • There are still a lot of ways to make money on the Internet.
      • Customer loyalty is built with reliable brand names and “sticky” web sites.
      • Next Big Thing - Broadband/WiFi
  • 11. Formulation
    • Which customers to serve?.
    • Identify Current & Future Competitive (dis)advantages
      • Find “fit” potential with SWOT ( S trengths, W eaknesses, O pportunities, and T hreats)
    • Assess likely competitive response(s)
  • 12. Formulation
    • Identify, then perform competitive comparison of key capabilities, e.g.
      • Quick response to market trends.
      • Rapid product development.
      • Rapid production and delivery.
      • Continuous cost reduction.
      • Continuous improvement of processes, human resources, and products.
      • Greater flexibility of operations.
  • 13. Formulation
    • Select option(s)
    • Formulate key objectives ( Results-oriented, measurable objectives )
      • Identify required activities
      • Assign responsibilities
      • Estimate time and sequencing of activities
      • Determine required resources
      • Lead, communicate, and coordinate the elements
  • 14. Strategic Implementation
    • Implementation of Strategic Plans
      • Cascading the plan - shift to implementation & build middle-manager commitment
        • new organizational structure(s)
        • (reorient or replace) people.
        • Culture (new?).
        • Control systems.