Strategic Management

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Strategic Management

  1. 1. Strategic Management ©2001 Pearson Education Canada Inc. Chapter 6 1
  2. 2. Chapter Objectives • Describe the five steps in the strategic management process • Describe the three steps needed to create strategic plans • Identify four strategic planning tools • Explain the three main types of strategies • Understand the important factors in strategy implementation ©2001 Pearson Education Canada Inc. Chapter 6 2
  3. 3. The Strategic Management Process Step 1 Step 2 Step 3 Step 4 Define the Business and Set Strategic Formulate Implement Set a Mission Goals a Strategy the Strategy Statement Step 5 Evaluate and Correct as Needed ©2001 Pearson Education Canada Inc. Chapter 6 3
  4. 4. Creating Strategic Plans Identify Formulate Implement Driving Forces a Strategy the Strategy Feedback ©2001 Pearson Education Canada Inc. Chapter 6 4
  5. 5. Levels of Uncertainty Relatively A Range Clear Future of Futures ©2001 Pearson Education Canada Inc. Chapter 6 5
  6. 6. SWOT Analysis Potential Strengths Potential Weaknesses •Market leadership •Large inventories •High-quality products •Management turnover •Cost advantages •Weak market image •Patents •Poor management depth Potential Opportunities Potential Threats •New overseas markets •Market saturation •Falling trade barriers •Takeover threat •Diversification •Slower market growth •Rebounding economy •Foreign competition ©2001 Pearson Education Canada Inc. Chapter 6 6
  7. 7. Environmental Scanning Economic Geographic Political Competitive Social Technological ©2001 Pearson Education Canada Inc. Chapter 6 7
  8. 8. Scenario Planning Signs of Change Perceptions Scenarios Global Reconstruction Order of Energy Industry Geopolitical Environmental Growth in Change Awareness East Asia Physical Sustainable Ecological World Stress on Limits the System Economic Political Global Limits Mercantilism Financial Economic Demographic Instability Imbalances Pressure Regional Reconfiguration Blocs of Energy Markets ©2001 Pearson Education Canada Inc. Chapter 6 8
  9. 9. Benchmarking • Focus on a specific problem • Involve key employees • Share information • Avoid sensitive issues • Maintain confidentiality ©2001 Pearson Education Canada Inc. Chapter 6 9
  10. 10. BCG Matrix Question High Stars Marks Market Growth Rate Cash Low Dogs Cows High Low Relative Market Share ©2001 Pearson Education Canada Inc. Chapter 6 10
  11. 11. The GE Business Screen Industry Attractiveness Criteria High Medium Low Criteria Size Industry size Low Growth Market growth Business Unit Position Share Market diversity Position Competition Medium Profitability Profitability Margins Technical role Technology Social Image Environmental High Pollution Legal People Human Build Hold Harvest ©2001 Pearson Education Canada Inc. Chapter 6 11
  12. 12. Strategic Planning Corporate Functional Competitive ©2001 Pearson Education Canada Inc. Chapter 6 12
  13. 13. Corporate-Level Strategies • Concentration • Vertical integration • Diversification • Status Quo • Investment reduction • Strategic alliances/joint ventures • Virtual corporation ©2001 Pearson Education Canada Inc. Chapter 6 13
  14. 14. Competitive Cost Leadership Strategies Differentiation Focus ©2001 Pearson Education Canada Inc. Chapter 6 14
  15. 15. Competitive Analysis: The Five Forces Model Potential Threat of new entrants Entrants Power of suppliers Industry Competitors Suppliers Buyers Rivalry Among Existing Firms Power of buyers Threat of substitutes Substitutes ©2001 Pearson Education Canada Inc. Chapter 6 15
  16. 16. Functional Strategies Strategic Strategic Business Goals Units ©2001 Pearson Education Canada Inc. Chapter 6 16
  17. 17. Activities Functional Strategy Activities Achieving Strategic Fit Activities Competitive Functional Strategy Strategy Activities Strategy Expert Michael Porter Activities Functional Strategy Activities ©2001 Pearson Education Canada Inc. Chapter 6 17
  18. 18. Strategy as Stretch and Leverage Core Leverage Competencies ©2001 Pearson Education Canada Inc. Chapter 6 18
  19. 19. Top Management Leadership Management People Functions ©2001 Pearson Education Canada Inc. Chapter 6 19

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