- 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.
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
Strategic Management = Strategic Planning + Implementation + Control
- 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.
- An integrated externally-oriented perception of how to achieve the organization’s mission.
Strategic Management = Strategic Planning + Implementation + Control (cont’d)
- The process of determining how to pursue the organization’s long-term goals with resources expected to be available.
- The whole is greater than the sum of the parts
- 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.
The Strategic Management Process
- Steps in the Strategic Management Process
- Formulate overall strategy
- Formulate supporting strategic objectives
- Make implementation decisions
- Establish control systems
Porter’s Generic Competitive Strategies
- Model’s Competitive Variables
- 1. How to compete (cost vs. being unique)
- 2. How broad is the target market
- Lowest cost structure position - provides advantages in pricing, supplier negotiation
- Unique/superior value position - provides brand loyalty.
Porter’s Generic Competitive Strategies (cont’d)
- Variations on cost/differentiation but with a focus on narrow or regional market segment
- 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.
- 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
- 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)
- 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.
- Formulate key objectives ( Results-oriented, measurable objectives )
- Identify required activities
- Estimate time and sequencing of activities
- Determine required resources
- Lead, communicate, and coordinate the elements
- Implementation of Strategic Plans
- Cascading the plan - shift to implementation & build middle-manager commitment
- new organizational structure(s)
- (reorient or replace) people.