Motivators & Drivers of Strategic Management

1. CHAPTER 2
Motivators and Drivers of STRATEGIC
MANAGEMENT

2. Why the need for strategic
management?
• Stiff Competition
– business organizations edge out or
outcompete each other to take control
of the market

3. Nature of market & business
• The ever changing market conditions.
• The changing taste of the market.
• Sociopolitical changes.
• The impact of global developments vis-a-vis the
local markets.
• The changes in the conduct of businesses.

4. The triggering events
Triggering events-situations or scenarios that
may have caused or resulted to the initiatives
of the top management to consider strategy.
2 forms of triggering events:
1. Internal triggering events
2. External triggering events

5. Internal triggering events
• New CEO/President
• Performance Gap
• Change in ownership
• Management team shake up
• Corporate reorganization/restructuring
• New products or services

6. External triggering events
• Overall economic environment
• Government
• Sociopolitical environment
• Legal Environment
• Technological environment
• Global/regional environment
• Market factors (demand & supply)
• Religious environment
• Occurrence of calamities/other natural
phenomenon

7. Theory of the Firm
• Monopoly-single seller of a product which
dominates the market
• Oligopoly-more than one producer or seller of
a product-homogeneous/differentiated
• Monopolistic competition-many sellers offers
similar products that are not perfect
substitutes for one another
• Perfect competition-many producers & sellers
of homogeneous product.

8. Other relevant theories influencing
Strategic Management
• Evolution and Revolution theories
• Industrial organization theory
• Chamberlin’s economic theories
• Contingency theory
• Resource-based theory
• Institution theory
• Organization learning theory
• Transaction cost economics