Strategic management process,generic strategy


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Strategic management process,generic strategy

  1. 1. Strategic management process<br />
  2. 2. What is SMP????<br />The strategic management process is a way for businesses to build strategies that help the company respond quickly to new challenges. This dynamic process helps organizations find new and more efficient ways to do business<br />
  3. 3.  A five-component approach to promote successful organizational performance<br />1. Vision formulation which leads to the statement of the Mission.<br />2. The mission is then converted into performance Objectives<br />3. To achieve objectives you develop Strategies<br />4. Strategy Implementation<br />5. Evaluation of performance <br />
  4. 4. 1.The vision formulation which leads to the statement of the Mission <br /><ul><li>what is business?
  5. 5. what will be the business?
  6. 6. it established long-term direction
  7. 7. it needs to use simple terminology
  8. 8. it needs to be inspirational buy in
  9. 9. Entrepreneurial
  10. 10. recognition of threats & opportunities</li></li></ul><li>Three Components of the mission statement<br /><ul><li>the needs to be served by the company
  11. 11. the targeted customer group
  12. 12. how the company will provide the product/service</li></li></ul><li>2. The mission is then converted into performance objectives<br /><ul><li>measurable statements
  13. 13. specified performance
  14. 14. specified time
  15. 15. short-range objectives
  16. 16. long-range objectives
  17. 17. top-down rather than bottom-up</li></li></ul><li>Two types of performance yardsticks<br /><ul><li>Financial objective
  18. 18. Strategic objective</li></li></ul><li>3. To achieve objectives you develop Strategies<br /><ul><li>action steps
  19. 19. the concepts of unified and consistent strategies
  20. 20. the moves and approaches used to achieve objectives
  21. 21. Dynamic
  22. 22. continual review and refinement
  23. 23. adjust to internal and external forces</li></ul> Levels of strategies<br />Corporategame plan for a diversified company<br />Businessgame plan for single business<br />Functionalstrategy initiatives of one part of a business<br />Operatinginitiatives of key operating units<br />
  24. 24. Factors affecting strategies<br /><ul><li>society forces
  25. 25. political and regulatory forces
  26. 26. citizenship considerations
  27. 27. the industry and competitive conditions
  28. 28. opportunities and threats
  29. 29. organizational strengths and weaknesses
  30. 30. ethical considerations
  31. 31. personal managerial ambitions
  32. 32. company culture</li></li></ul><li>Strategy making styles<br />Master Strategist self- explanatory<br />Delegate-to-Othersbottom-up<br />Collaborativemiddle approach<br />Championbottom up with manager interest<br />
  33. 33. 4.Strategy Implementation<br /> <br /><ul><li>making it happen
  34. 34. structuring an organization
  35. 35. Budgeting
  36. 36. Motivating
  37. 37. creating reward structures
  38. 38. creating work environment
  39. 39. information & reporting systems</li></li></ul><li> 5. Evaluationof performance<br /><ul><li>review process
  40. 40. adjust mission
  41. 41. adjust objectives
  42. 42. adjust strategies
  43. 43. initiate corrective measures</li></li></ul><li>Generic strategy<br />
  44. 44. Michael Porter has described a category scheme consisting of three general types of strategies that are commonly used by businesses to achieve and maintain competitive advantage.<br />
  45. 45. The generic strategies are:<br /> 1. Cost leadership<br />2. Differentiation<br />3. Focus.<br />Cost Leadership.<br />The low cost leader in any market gains competitive advantage from being able to produce at the lowest cost. <br />2. Differentiation<br />Differentiated goods and services satisfy the needs of customers through a sustainable competitive advantage. This allows companies to desensitize prices and focus on value that generates a comparatively higher price and a better margin.<br />3. Focus or Niche strategy.<br />The focus strategy is also known as a 'niche' strategy. Where an organization can afford neither a wide scope cost leadership nor a wide scope differentiation strategy, a niche strategy could be more suitable.<br />
  46. 46. The danger of being 'stuck in the middle.'<br />Make sure that you select one generic strategy. It is argued that if you select one or more approaches, and then fail to achieve them, that your organization gets stuck in the middle without a competitive advantage.<br />
  47. 47. Thank you<br />