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David sm13 ppt_01

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David sm13 ppt_01

  1. 1. Chapter 1The Nature of Strategic Management Strategic Management: Concepts & Cases 13th Edition Fred David Copyright © 2011 Pearson Education, Inc. Ch 1 -1
  2. 2. Strategic Management –Defined Art & science of formulating, implementing, and evaluating, cross-functional decisions that enable an organization to achieve its objectives Copyright © 2011 Pearson Education, Inc. Ch 1 -2
  3. 3. Strategic ManagementIn essence, the strategic plan is acompany’s game plan Copyright © 2011 Pearson Education, Inc. Ch 1 -3
  4. 4. 3 Stages of the StrategicManagement Process Strategy formulation Strategy implementation Strategy evaluation Copyright © 2011 Pearson Education, Inc. Ch 1 -4
  5. 5. Strategy Formulation Vision & Mission External Opportunities & Threats Internal Strengths & Weaknesses Long-Term Objectives Alternative Strategies Strategy Selection Copyright © 2011 Pearson Education, Inc. Ch 1 -5
  6. 6. Strategy Implementation Annual Objectives Policies Employee Motivation Resource Allocation Copyright © 2011 Pearson Education, Inc. Ch 1 -6
  7. 7. Strategy Evaluation Internal Review External Review Performance Measurement Corrective Action Copyright © 2011 Pearson Education, Inc. Ch 1 -7
  8. 8. Key Terms in Strategic Management Competitive advantage Strategists Vision and mission statements External opportunities and threats Internal strengths and weaknesses Long-term objectives Strategies Annual objectives Policies Copyright © 2011 Pearson Education, Inc. Ch 1 -8
  9. 9. Strategic Management isGaining and MaintainingCompetitive Advantage Anything that a firm does especially well compared to rival firms Copyright © 2011 Pearson Education, Inc. Ch 1 -9
  10. 10. Strategists Gather Information Analyze Information Organize Information Copyright © 2011 Pearson Education, Inc. Ch 1 -10
  11. 11. Vision and Mission Statements Vision Statement – What do we want to become? Mission Statement – What is our business? Copyright © 2011 Pearson Education, Inc. Ch 1 -11
  12. 12. External Opportunities and Threats Analysis of Trends  Economic  Social  Cultural  Demographic/Environmental  Political, Legal, Governmental  Technological  Competitors Copyright © 2011 Pearson Education, Inc. Ch 1 -12
  13. 13. External Opportunities and ThreatsBasic Tenet of Strategic Management Take advantage of Take advantage of External Opportunities External Opportunities Strategy Formulation Avoid/minimize impact of Avoid/minimize impact of External Threats External Threats Copyright © 2011 Pearson Education, Inc. Ch 1 -13
  14. 14. Internal Strengths and Weaknesses  Controllable activities performed especially well or poorly  Determined relative to competitors Copyright © 2011 Pearson Education, Inc. Ch 1 -14
  15. 15. Internal Strengths and Weaknesses Typically located in functional areas of the firm  Management  Marketing  Finance/Accounting  Production/Operations  Research & Development  Management Information Systems Copyright © 2011 Pearson Education, Inc. Ch 1 -15
  16. 16. Internal Strengths and WeaknessesAssessing the Internal Environment Financial Ratios Performance Measures Internal Factors Industry Averages Survey Data Copyright © 2011 Pearson Education, Inc. Ch 1 -16
  17. 17. Long-Term Objectives  Specific results that an organization seeks to achieve in pursuing its basic mission  Long-term means more than one year Copyright © 2011 Pearson Education, Inc. Ch 1 -17
  18. 18. Long-Term Objectives Essential for ensuring the firm’s success  Provide direction  Aid in evaluation  Create synergy  Reveal priorities  Focus coordination  Provide basis for planning, organizing, motivating, and controlling Copyright © 2011 Pearson Education, Inc. Ch 1 -18
  19. 19. Strategies Means by which long-term objectives are achieved Copyright © 2011 Pearson Education, Inc. Ch 1 -19
  20. 20. Strategies  Examples  Geographic expansion  Diversification  Acquisition  Product development  Market penetration  Retrenchment  Divestiture  Liquidation  Joint venture Copyright © 2011 Pearson Education, Inc. Ch 1 -20
  21. 21. Annual Objectives Short-term milestones that firms must achieve to reach long-term objectives Copyright © 2011 Pearson Education, Inc. Ch 1 -21
  22. 22. Policies Means by which annual objectives will be achieved Copyright © 2011 Pearson Education, Inc. Ch 1 -22
  23. 23. Copyright © 2011 PearsonEducation, Inc. Ch 1 -23
  24. 24. Strategic Management Model  StrategicManagement Process  Dynamic & continuous  More formal in larger organizations Copyright © 2011 Pearson Education, Inc. Ch 1 -24
  25. 25. Strategic Management Communication is a key to successful strategic management Copyright © 2011 Pearson Education, Inc. Ch 1 -25
  26. 26. Benefits of Strategic Management Copyright © 2011 Pearson Education, Inc. Ch 1 -26
  27. 27. Benefits of Strategic Management Nonfinancial Benefits  Enhanced awareness of threats  Improved understanding of competitors’ strategies  Increased employee productivity  Reduced resistance to change  Clearer understanding of performance-reward relationship  Enhanced problem-prevention capabilities Copyright © 2011 Pearson Education, Inc. Ch 1 -27
  28. 28. Why Some Firms Do No StrategicPlanning Lack of knowledge of strategic planning Poor reward structures Fire fighting Waste of time Too expensive Laziness Content with success Copyright © 2011 Pearson Education, Inc. Ch 1 -28
  29. 29. Why Some Firms Do No StrategicPlanning (continued) Fear of failure Overconfidence Prior bad experience Self-interest Fear of the unknown Honest difference of opinion Suspicion Copyright © 2011 Pearson Education, Inc. Ch 1 -29

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