3. Strategy Defined
“Strategic management can
be defined as the art and
science of formulating,
implementing and evaluating
cross-functional decisions
that enable an organization to
achieve its objectives.”
4. Strategy Defined
“An integrative management field
that combines analysis,
formulation, and implementation
in the quest for competitive
advantage.”
6. Strategy Defined
“Strategic management is
defined as the process by which
managers of the firm analyse
the internal and external
environments for the purpose of
formulating strategies and
allocating resources to develop
a competitive advantage in an
industry that allows for the
successful achievement of
organisational goals.”
7. What is strategic management?
Various definitions are used
to describe the subject, but
few give a full and easy to
understand answer. The
combination of all four
definitions used previously
gives us a clearer view of
what the subject is:
8. Combined Strategic Definition
Strategic management is a
continuous process of
strategic analysis,
formulation, implementation
and monitoring, used by
organisations with the
purpose to achieve and
maintain a competitive
advantage.
It is a reflection action tool!
11. Strategic Purpose
The general purpose of doing
it is to combine the energy of
an organisation’s functional
areas into one focused effort
to achieve superior
performance. It is usually
done through the many steps
of a process and should
ultimately be closely alligned
with the culture of the
organisation.
12. The 3 Key Questions!
In essence, it answers the following 3
questions:
Where is the organisation is at the
moment?
Where does it want to go?
How it will get there?
13. Predicting The Future
Strategic management is not
about predicting the future,
but about preparing for it and
knowing what exact steps the
company will have to take to
implement its strategic plan
and achieve a competitive
advantage.
14. Strategic Plan or Management?
Both strategic management and
strategic planning terms mean the
same! The difference is that the latter
one is more used in the business
world while the former is used in the
academic environment.
15. Business v Academic
Both strategic management
and strategic planning terms
mean the same! The
difference is that the latter
one is more used in the
business world while the
former is used in the
academic environment.
16. Concepts and Cases
According to David,
strategic planning is
sometimes confused with
strategy formulation, because
strategic plan is constructed
in this stage.
17. Importance of Strategic PLanning
Requirement for sustained
competitive advantage.
Competitive advantage is what
keeps great organisations ahead of
their competitors.
Rothaermel pointed out that the
company, which has a competitive
advantage, performs financially
much better than other companies
in the industry or better than the
industry average.
18. Strategic Committment
Some companies may
achieve competitive
advantage without thorough
strategic planning, but for the
most players it is vital to plan
strategically, i.e. analyse,
create, implement and
monitor, and do this
continuously.
19. Sustainable Advantage
It is not guaranteed that
companies will ever achieve
competitive advantage
conducting strategic
planning, but it is an essential
process if the company wants
sustain it.
20. Strategy – Broad Cohesive Perspective
A reason why organisations don’t
simply rely on their finances,
marketing or operations functional
areas to create competitive
advantage is that managers of
each area often view things only
from their own specific angle, ,
which is too narrow view for the
whole organisation to rely upon.
21. Custodians of Strategy
It is the function of the
managers (e.g. CEOs or
strategic planners) who see
the whole picture of the
company and its surrounding
environments to make the
decisions that bring the
competitive advantage.
23. Managing the Middle
Most companies involve middle
managers of functional areas
into the process of formulating
strategic plan. Middle managers
are the people who implement
the strategies set out in a plan
and if they aren’t involved in
making the plan, then they
aren’t so committed to support
it. Manage the Culture.
24. Strategic Communications
Strategic planning is used to
achieve competitive
advantage and to integrate
all the functional areas of the
company by facilitating the
communication between the
employees at all levels.
26. Benefits of Strategic Management
1. Defines a company’s
vision, mission and future
goals.
27. Benefits of Strategic Management
2. Identifies the suitable
strategies to achieve the
goals. It may be a
marketing, lean, internal
comunication, R&D, etc
strategy.
28. Benefits of Strategic Management
3. Improves awareness of
the external and internal
environments, and clearly
identifies the competitive
advantage.
29. Benefits of Strategic Management
4. Increases managers’
commitment to achieving
the company’s objectives.
30. Benefits of Strategic Management
5. Improves coordination
of the activities and more
efficient allocation of
company’s resources.
31. Benefits of Strategic Management
6. Better communication
between managers of the
different levels and
functional areas.
32. Benefits of Strategic Management
7. Reduces resistance to
change by informing the
employees of the changes
and the consequences of
them.
33. Benefits of Strategic Management
8. Strengthens the firm’s
performance. Strong
performance may not
immediately mean more
profits.
“If you manage in the
good times, you do not
have to manage so hard
in the bad times”
34. Benefits of Strategic Management
9. On average, companies
using strategic
management are more
successful than the
companies that don’t.
35. Benefits of Strategic Management
10. Strategic planning
allows the organisation to
become more proactive
than reactive.
39. Sources
1. David, F.R. (2009). Strat.Mgmt.: Concepts and Cases. 12th ed. FT Prentice Hall, p.
36-37, 40, 48
2. Rothaermel, F. T. (2012). Strat.Mgmt.: Concepts and Cases. McGraw-Hill/Irwin, p. 5
3. Johnson, G, Scholes, K. Whittington, R. (2008). Exploring Corporate Strategy. 8th
ed. FT Prentice Hall, p. 11-12
4. Cox, M. Z., Daspit, J., McLaughlin, E. and Jones III, R.J. (2012). Strat.Mgmt.: Is It
an Academic Discipline? Journal of Business Strategies, Vol. 29 Issue 1, pp. 27-28
5. Blatstein, I.M. (2012). Strategic Planning: Predicting or Shaping the Future?
Organization Development Journal, Vol. 30 Issues 2, pp. 32
6. Wikipedia (2013). Strategic Management. Available at:
http://en.wikipedia.org/wiki/Strategic_management
7. Business Gateway (2012). Strategic planning: the basics. Available
at:http://www.bgateway.com/grow-improve/growing-a-business/strategic-planning-the-
basics/#page-1576
40. The Strategic Management Process
● “Strategic management process is a
method by which managers conceive of
and implement a strategy that can lead to
a sustainable competitive advantage.”[1]
● “It is a process by which an organization
establishes its objectives, formulates
actions (strategies) designed to meet
these objectives in the desired timescale,
implements the actions, and assesses
progress and results.”[2]
● “Strategic planning process is a
systematic or emerged way of performing
strategic planning in the organization
through initial assessment, thorough
analysis, strategy formulation, its
implementation and evaluation.”
42. Strategic Integration Definition
Horizontal Integration is the
process of acquiring or merging
with competitors, leading to
industry consolidation.
Horizontal integration is a
strategy where a company
acquires, mergers or takes over
another company in the same
industry value chain.”
43. What is horizontal integration?
It is a type of integration strategies
pursued by a company in order to
strengthen its position in the
industry. A corporate that
implements this type of strategy
usually mergers or acquires another
company that is in the same
production stage. For example,
Disney merging with Pixar (movie
production), Exxon with Mobile (oil
production, refining and distribution)
or the infamous Daimler Benz and
Chrysler merger (car developing,
manufacturing and retailing).
44. Horizontal Integration Purpose
The purpose of horizontal
integration (HI) is to grow the
company in size, increase product
differentiation, achieve
economies of scale, reduce
competition or access new
markets. When many firms
pursue this strategy in the same
industry, it leads to industry
consolidation (oligopoly or even
monopoly)
45. HI Versions
HI can occur in a form of
mergers, acquisitions or hostile
takeovers. Merger is the
joining of two similar sizes,
independent companies to
make one joint entity.
Acquisition is the purchase of
another company. Hostile
takeover is the acquisition of
the company, which does not
want to be acquired.
46. Horizontal Effectiveness
● Organisation competes in a growing
industry.
● Competitors lack of some
capabilities, competencies, skills or
resources that the company already
possesses.
● HI would lead to a monopoly that is
allowed by a government.
● Economies of scale would have
significant effect.
● The organisation has sufficient
resources to manage M&A.
48. Horizontal v Vertical
HI is different from vertical
integration, where a firm usually
expands into another production
stage rather than merging or
acquiring the company in the
same production stage. For
example, a company is vertically
integrating if it expands from
manufacturing industry to
retailing industry, while HI would
mean buying other firms in the
same manufacturing industry.
49. Horizontal Integration Examples
ACQUIRING COMPANY ACQUIRED COMPANY
Porsche Volkswagen
Daimler Benz Chrysler
Kraft Foods Cadbury
Pepsico Quaker Oats
HP Compaq
Microsoft Yahoo
BP Amoco
United Airlines Continental
Delta Northwest Airlines
Oracle Peoplesoft
AT&T T-Mobile
Glaxo Welcome SmithKline Beecham
50. Advantages of horizontal integration
● Lower costs. The result of HI is one larger
company, which produces more services and
products. The higher output leads to greater
economies of scale and higher efficiency.
● Increased differentiation. The combined company
can offer more product or service features.
● Increased market power. The larger company has
more power over its suppliers and
distributors/customers.
●
Reduced competition. The result of industry
consolidation is fewer companies operating in the
industry and less intense competition.
● Access to new markets. New markets and
distribution channels can be accessed by
integrating with a company that produces the
same goods but operates in a different region or
serves different market segment
51. Disadvantages of the strategy
● Destroyed value. M&A rarely add value
to the companies. More often M&A fail
and destroy the value of the companies
involved in it because expected synergies
never materialize.
● Legal repercussions. HI can lead to a
monopoly, which is highly discouraged
by many governments due to lack of
competition. Therefore, governments
usually have to approve any larger M&A
before they can happen.
● Reduced flexibility. Large organisations
are harder to manage and they are less
flexible in introducing innovations to the
market.
52. Strategic Vertical Integration Definition
“Vertical integration is a
strategy used by a company
to gain control over its
suppliers or distributors in
order to increase the firm’s
power in the marketplace,
reduce transaction costs and
secure supplies or
distribution channels.”
53. Strategic Integration Definition
“Forward integration is
a strategy where a firm
gains ownership or
increased control over its
previous customers
(distributors or
retailers).”
55. Vertical Integration Consideration
Costs. An organisation should vertically
integrate when costs of making the
product inside the company are lower
than the costs of buying that product in
the market.
Scope of the firm. A firm should
consider whether moving into new
industries would not dilute its current
competencies. New activities in a
company are also harder to manage and
control. The answers to previous
questions determine if a company will
pursue none, partial or full VI.
56. What is vertical integration?
Vertical integration (VI) is a strategy that
many companies use to gain control over
their industry’s value chain. This strategy
is one of the major considerations when
developing corporate level strategy. The
important question in corporate strategy
is, whether the company should
participate in one activity (one industry)
or many activities (many industries)
along the industry value chain. For
example, the company has to decide if it
only manufactures its products or would
engage in retailing and after-sales
services as well. Two issues have to be
considered before integration:
58. Horizontal v Vertical Difference
VI is different from horizontal
integration, where a corporate
usually acquires or mergers with a
competitor in a same industry. An
example of horizontal integration
would be a company competing in
raw materials industry and buying
another company in the same
industry rather than trying to expand
to intermediate goods industry.
Horizontal integration examples:
Kraft Foods taking over Cadbury, HP
acquiring Compaq or Lenovo buying
personal computer division from
IBM.
60. Forward Integration
If the manufacturing company
engages in sales or after-sales
industries it pursues forward
integration strategy. This strategy is
implemented when the company
wants to achieve higher economies
of scale and larger market share.
Forward integration strategy became
very popular with increasing internet
appearance. Many manufacturing
companies have built their online
stores and started selling their
products directly to consumers,
bypassing retailers.
61. Forward Integration Reason
● Few quality distributors are available in
the industry.
● Distributors or retailers have high profit
margins.
● Distributors are very expensive,
unreliable or unable to meet firm’s
distribution needs.
● The industry is expected to grow
significantly.
● There are benefits of stable production
and distribution.
● The company has enough resources and
capabilities to manage the new business.
62. Backward Integration
When the same manufacturing
company starts making
intermediate goods for itself or
takes over its previous
suppliers, it pursues backward
integration strategy. Firms
implement backward
integration strategy in order to
secure stable input of resources
and become more efficient.
63. Backward Integration Reason
● Firm’s current suppliers are
unreliable, expensive or cannot
supply the required inputs.
● There are only few small suppliers
but many competitors in the industry.
● The industry is expanding rapidly.
● The prices of inputs are unstable.
● Suppliers earn high profit margins.
● A company has necessary resources
and capabilities to manage the new
business.
69. Advantages of Vertical Integration
● Advantages of the strategy:
Lower costs due to eliminated market
transaction costs
● Improved quality of supplies
● Critical resources can be acquired
through VI
● Improved coordination in supply chain
● Greater market share
● Secured distribution channels
● Facilitates investment in specialized
assets (site, physical-assets and human-
assets)
● New competencies
70. Disadvantages of Vertical Integration
● Disadvantages of VI:
● Higher costs if the company is incapable
to manage new activities efficiently
● The ownership of supply and distribution
channels may lead to lower quality
products and reduced efficiency because
of the lack of competition
● Increased bureaucracy and higher
investments leads to reduced flexibility
● Higher potential for legal repercussion
due to size (An organization may become
a monopoly)
● New competencies may clash with old
ones and lead to competitive
disadvantage
71. Alternatives to Vertical Integration
● Alternatives to VI
● This strategy may not always be
the best choice for an
organization due to a lack of
sufficient resources that are
needed to venture into a new
industry. Sometimes the
alternatives to VI offer more
benefits. The available choices
differ in the amount of
investments required and the
integration level. For example,
short-term contracts require little
integration and much less
investments than joint ventures.
74. Part Four – Strategic Tools
● This section covers the
essential and the most
popular business strategy
tools used by companies to
implement their strategic
plans and achieve a
sustained competitive
advantage.
These tools are from a range
of tools available within our
time frame today! 319,000
Google Results.
76. The Vision Statment
● A vision statement asks ‘What
does our business want to
become?’ and usually is a one
sentence, inspirational, clear and
memorable statement that
expresses company’s desired
long-term position. It motivates
employees to make extra effort
and usually results in higher
performance. Because money
rewards only partly motivates
employees, it is important to use
other tools such as vision
statement to increase their
motivation
77. Strategic Intent
● Vision is closely related with a
term ‘strategic intent’ – a desired
leadership position that is
currently unachievable due to the
lack of resources and capabilities.
It is also defined as the
combination of vision and
mission.
78.
79. Vision Benefits
● Not all the visions are equally good.
Some of them are very generic or focus
on financial objectives and as a result,
poorly motivates employees. But if a
company puts enough efforts in creating
vision statement, it results into following
benefits:
● Motivates and inspires employees
● Provides one purpose to work for
● Sets the stretch goals (goals that are
impossible to achieve with current
resources and capabilities)
● Guides managers in effectively allocating
resources
80. Writing The Statement
● Step 1. Gather a team of
managers, employees and
shareholders. Vision is the
statement that must be understood
by employees of all levels. As
many people as possible should
be involved in the process
because involvement leads to
stronger commitment to
company’s vision. After choosing
the people that will be involved
you should also distribute several
articles to them about what is
organisation’s vision and ask
everyone to read them as a
background.
81. Writing the Statement
● Step 2. Ask everyone to write
their own version of vision. The
next step is to ask everyone to
write his or her own version of
the statement and submit it to the
responsible team. After receiving
the statements, the team should
try to combine draft vision out of
all the submissions. This is also a
great opportunity to resolve any
conflicting views about firm’s
ultimate objective.
82. Writing The Statement
● Step 3. Revise the statement and
present the final version. The
draft statement should be
distributed to the members again
for their last revision. Upon
receiving the feedback, the final
version of the vision should be
created and presented to every
employee.
83. A Memorable Vision Statement
● A vision statement should be a
one clear sentence, inspirational
and memorable.
84. Wow!
● Chevron: To be the global energy company most admired for its people,
partnership and performance.
● Feeding America: A hunger-free America
● Habitat for Humanity: A world where everyone has a decent place to
live.
● Microsoft: A computer on every desk and in every home
● Save the Children: Our vision is a world in which every child attains the
right to survival, protection, development and participation.
85. Ooops!
● General Motors: To design, build and sell the world’s best vehicles. ( GM should have
specified their objective)
● Ikea: At Ikea our vision is to create a better everyday life for the many people. (This is
impossible to achieve, they sell furniture! )
● Samsung: Inspire the World, Create the Future. (The statement is too vague and doesn’t
set any objectives)
● Toyota: Toyota will lead the way to the future of mobility, enriching lives around the
world with the safest and most responsible ways of moving people. Through our
commitment to quality, constant innovation and respect for the planet, we aim to exceed
expectations and be rewarded with a smile. We will meet our challenging goals by
engaging the talent and passion of people, who believe there is always a better way. (It is
too long and sounds more like a mission than a true vision)
86. Part Five – The Strategic Management
Processes!
87. What is Strategic Management
● “Strategic management process
is a method by which managers
conceive of and implement a
strategy that can lead to a
sustainable competitive
advantage.”
88. The Strategic Management Process
● “It is a process by which an
organisation establishes its
objectives, formulates actions
(strategies) designed to meet
these objectives in the desired
timescale, implements the actions,
and assesses progress and
results.”
89. Strategic Planning
● “Strategic planning process is a systematic or emerged way of
performing strategic planning in the organisation through initial
assessment, thorough analysis, strategy formulation, its implementation
and evaluation.”
90. The Process (doing) of Strategic
Management
● The process of strategic management lists what steps the managers should
take to create a complete strategy and how to implement that strategy
successfully in the company. It might comprise from 7 to nearly 30 steps
and tends to be more formal in well-established organisations.
91. Salami Slicing
● The salami slicing process is how a
project is sliced into component
parts, often of various
thickness.Various schools slice the “
salami” differently and use different
component names for each slice!
92. Strategy Creation
● The ways that strategies are
created and realised differ. There
are many different models of the
process. The models vary
between companies typically
depending upon:
● Organisation’s culture.
● Leadership style.
● The experience the firm has in
creating successful strategies.
93. Design School Strategy
● All the examples of the
process in this the following
slides represent top-down
approach and belong to the
‘design school’. This is the
accepted global academic
norm. It is based on a
hierarchical company
structure.
94. Strategic Components
● There are many components of
the process which are spread
throughout strategic planning
stages. Most often, the strategic
planning process has 4 common
phases: strategic analysis,
strategy formulation,
implementation and
monitoring. For clearer
understanding, this programme
represents 5 stages of the
strategic planning process.
● Evaluation!
97. Vision and Mission
● Vision answers the question: What does an organisation want to become? Without
visualising the company’s future, managers wouldn’t know where they want to go and
what they have to achieve. Vision is the ultimate goal for the firm and the direction for its
employees.
● Mission describes a company’s business. It informs the organisation’s stakeholders about
the products, customers, markets, values, concern for public image and employees of the
organisation . A thorough mission statement acts as guidance for managers in making
appropriate short term decisions.
99. Shining a Light
● When the company identifies its
vision and mission it must assess
its current situation in the market.
This includes evaluating an
organisation’s external and
internal environments and
analysing its competitors.
100. External Analysis
● During external environment
analysis managers look into the
key external forces: macro &
micro environments and
competition. PEST or PESTLE
frameworks represent all the
macro environment factors that
influence the organization in the
global environment. Micro
environment affects the company
in its industry. It is analyzed using
Porter’s 5 Forces Framework.
101. Internal Analysis
● Internal analysis includes the
assessment of the company’s
resources, core competencies
and activities. An organisation
holds both tangible resources:
capital, land, equipment, and
intangible resources: culture,
brand equity, knowledge,
patents, copyrights and
trademarks. A firm’s core
competencies may be superior
skills in customer relationship
or efficient supply chain
management. When analysing
the company’s activities
managers look into the value
chain and the whole production
process.
102. SWOT
● As a result, situation analysis
identifies strengths, weaknesses,
opportunities and threats for the
organization and reveals a clear
picture of company’s situation in
the market.
103. Strategy Formulation
● Components: Objectives,
Business level, Corporate level
and Global Strategy Selection
● Tools used: Scenario Planning,
SPACE Matrix, Boston
Consulting Group Matrix, GE-
McKinsey Matrix, Porter’s
Generic Strategies, Bowman’s
Strategy Clock, Porter’s
Diamond, Game Theory, QSP
Matrix.
104. Business Level Strategy
● Business level strategy. This type of
strategy is used when strategic business
units (SBU), divisions or small and
medium enterprises select strategies for
only one product that is sold in only one
market. The example of business level
strategy is well illustrated by Royal
Enfield firms. They sell their Bullet
motorcycle (one product) in United
Kingdom and India (different markets)
but focus on different market segments
and sell at very different prices (different
strategies). Firms may select between
Porter’s 3 generic strategies: cost
leadership, differentiation and focus
strategies.
105. Corporate Level Strategy
● Corporate level strategy. At this
level, executives at top parent
companies choose which products
to sell, which market to enter and
whether to acquire a competitor
or merge with it. They select
between integration, intensive,
diversification and defensive
strategies.
108. Strategy Implementation (David)
● At this stage, managerial skills are more
important than using analysis. Communication in
strategy implementation is essential as new
strategies must get support all over organisation
for effective implementation.
● Setting annual objectives;
● Revising policies to meet the objectives;
● Allocating resources to strategically important
areas;
● Changing organizational structure to meet new
strategy;
● Managing resistance to change;
● Introducing new reward system for performance
results if needed.
109. Strategy Implementation
● The first point in strategy
implementation is setting annual
objectives for the company’s
functional areas. These smaller
objectives are specifically
designed to achieve financial,
marketing, operations, human
resources and other functional
goals. To meet these goals
managers revise existing policies
and introduce new ones which act
as the directions for successful
objectives implementation.
110. Strategy Implementation
● The other very important part of strategy
implementation is changing an
organisational chart. For example, a
product diversification strategy may
require new SBU to be incorporated into
the existing organisational chart. Or
market development strategy may require
an additional division to be added to the
company. Every new strategy changes
the organisational structure and requires
reallocation of resources. It also
redistributes responsibilities and powers
between managers. Managers may be
moved from one functional area to
another or asked to manage a new team.
This creates resistance to change, which
has to be managed in an appropriate way
or it could ruin excellent strategy
implementation.
112. Strategy Monitoring
● Implementation must be monitored to be
successful. Due to constantly changing
external and internal conditions managers
must continuously review both
environments as new strengths,
weaknesses, opportunities and threats
may arise. If new circumstances affect
the company, managers must take
corrective actions as soon as possible.
● Usually, tactics rather than strategies are
changed to meet the new conditions,
unless firms are faced with such severe
external changes as the 2008 credit
crunch.
113. Strategy Monitoring
● Measuring performance is another
important activity in strategy monitoring.
Performance has to be measurable and
comparable. Managers have to compare
their actual results with estimated results
and see if they are successful in
achieving their objectives. If objectives
are not met managers should:
● Change the reward system.
● Introduce new or revise existing policies.
● The key element in strategy monitoring
is to get the relevant and timely
information on changing environment
and the company’s performance and if
necessary take corrective actions.
114. Different models of the process
● There is no universal model of the
strategic management process.
The one, we have described in
this presentation, is just one more
version of so many models that
are established by other authors.
In this section we will illustrate
and comment on 3 more well-
known frameworks presented by
recognised scholars in the
strategic management field. More
about these models can be found
in the author's books.
116. David’s Model of the Strategic
Management’s Process
● Stages
● Strategy Formulation
● Strategy Implementation
● Strategy Evaluation
117. David’s Model of the Strategic
Management’s Process
● Steps
● Develop vision and mission
● External environment analysis
● Internal environment analysis
● Establish long-term objectives
● Generate, evaluate and choose
strategies
● Implement strategies
● Measure and evaluate
performance
118. David’s Model of the Strategic
Management’s Process
● Benefits
● Indicates all the major steps that have to
be met during the process.
● Illustrates that the process is a continuous
activity.
● Arrows show the two way process. This
means that companies may sometimes go
a step or two back in the process rather
than having to complete the process and
start it all over from the beginning. For
example, if in the implementation stage
the company finds out that the strategy it
chose is not viable, it can simply go back
to the strategy selection point instead of
continuing to the monitoring stage and
starting the process from the beginning.
119. David’s Model of the Strategic
Management’s Process
● Drawbacks
● Represents only strategy
formulation stage and does
separate situation analysis from
strategy selection stages.
● Confuses strategy evaluation with
strategy monitoring stage.
124. Rothaermel’s The Analysis-Formulation-Implementation
(AFI) Strategy Framework
● Benefits
● Shows that the process is a
continuous activity.
● Separates initial analysis from
internal/external analysis.
● Emphasizes the main focus of
strategic management: “Gain and
sustain competitive advantage”
125. Rothaermel’s The Analysis-Formulation-Implementation
(AFI) Strategy Framework
● Drawbacks
● Does not include strategy
monitoring stage.
● Arrows indicate only one way
process. For example, after the
strategy formulation the process
continues to the implementation
stage while this is not always the
truth. Companies may go back
and reassess their environments if
some conditions had changed.
127. Thompson’s and Martin’s Strategic Management
Framework
● Stages
● Where are we?
● Where are we going?
● How are we getting there?
● How are we doing?
128. Thompson’s and Martin’s Strategic Management
Framework
● Steps
● Situation appraisal: review of
corporate objectives
● Situation assessment
● Clarification of objectives
● Corporate and competitive
strategies
● Strategic decisions
● Implementation
● Monitor progress
129. Thompson’s and Martin’s Strategic Management
Framework
● Benefits
● Indicates all the major steps that
have to be met during the process.
● Shows that the process is a
continuous activity.
● The model is supplemented by 4
fundamental strategic
management questions.
● Drawbacks
● Arrows indicate only one way
process. Simplest Strategy!
130. Note
● It is rare that the company will be able to follow the process from the first
to the last step. Producing a quality strategic plan requires time, during
which many external and even internal conditions may change. This
results in the flawed strategic plan which has to be revised, hence
requiring even more time to finish.
● On the other hand, when implementing the strategic plan, the actual
results do not meet the requirements of the strategic plan so the plan has
to be altered or better methods for the implementation have to be
discovered. This means that some parts of strategic management process
have to be done simultaneously, which makes the whole process more
complex.
131. Sources
● Rothaermel, F. T. (2012). Strategic Management: Concepts and Cases.
McGraw-Hill/Irwin, p. 20, 32-45, 90
● Thompson, J. and Martin, F. (2010). Strategic Management: Awareness &
Change. 6th ed. Cengage Learning EMEA, p. 34, 557, 790
● Clark, D. N. (1997). Strategic management tool usage: a comparative
study. Strategic Change Vol. 6, pp. 417-427
● David, F.R. (2009). Strategic Management: Concepts and Cases. 12th ed.
FT Prentice Hall, p. 36-37, 45-47, 93
● Johnson, G, Scholes, K. Whittington, R. (2008). Exploring Corporate
Strategy. 8th ed. FT Prentice Hall, p. 11-13, 224, 294
