This document provides an overview of strategic management concepts from Chapter 9 of an introduction to management textbook. It discusses strategic management as comprising strategic analysis, formulation, and implementation to accomplish long-term goals. Key points covered include the levels of strategy (corporate, business, functional), Porter's five forces model, the BCG matrix for portfolio analysis, corporate strategies like growth and retrenchment, and Porter's framework for business strategies.

1. Introduction to Management 11e
John Schermerhorn
Chapter 9Chapter 9
The Strategic Management ProcessThe Strategic Management Process

2. Planning Ahead — Chapter 9 Study Questions
1. What is strategic management?
2. What are the essentials of strategic analysis?
3. What are corporate-level strategies, and how
are they formulated?
4. What are business-level strategies and how
are they formulated?
5. What are the foundations for strategy
implementation?
Management 11e Chapter 9 2

3. Study Question 1: What is strategic management?
 Basic concepts of strategy:
 Competitive advantage — operating with an
attribute or set of attributes that allows an
organization to outperform its rivals
 Sustainable competitive advantage — one
that is difficult for competitors to imitate
Management 11e Chapter 9 3

4. Study Question 1: What is strategic management?
 Types of competitive advantage
 Cost and quality
 Knowledge and speed
 Barriers to entry
 Financial resources
Management 11e Chapter 9 4

5. Study Question 1: What is strategic management?
 Basic concepts of strategy
 Strategy
 a comprehensive action plan that identifies long-
term direction for an organization and guides
resource utilization to accomplish organizational
goals with sustainable competitive advantage
 Strategic intent
 focusing all organizational energies on a unifying
and compelling goal
Management 11e Chapter 9 5

6. Study Question 1: What is strategic management?
 Levels of strategies
 Corporate
 Sets long-term direction for the total enterprise
 Business
 How a division or strategic business unit will
compete in its product or service domain
 Functional
 Guides activities within one specific area of
operations
Management 11e Chapter 9 6

7. Figure 9.1 Three levels of strategy in organizations- corporate,
business, functional strategies
Management 11e Chapter 9 7

8. Study Question 1: What is strategic management?
 Strategic Management Process:
 Strategic management
 the process of formulating and implementing
strategies to accomplish long-term goals and
sustain competitive advantage
 Strategic analysis
 process of analyzing the organization, the
environment, its competitive position and current
strategies
Management 11e Chapter 9 8

9. Figure 9.2 Strategy formulation and implementation in the strategic
management process
Management 11e Chapter 9 9

10. Study Question 1: What is strategic management?
 Strategic Management Process:
 Strategy formulation
 the process of crafting strategies to guide
allocation of resources
 Strategy implementation
 putting strategies into action
Management 11e Chapter 9 10

11. Study Question 1: What is strategic management?
 Strategy formulation
 The process of creating strategy
 Involves assessing existing strategies,
organization, and environment to develop
new strategies and strategic plans capable of
delivering future
competitive advantage
Management 11e Chapter 9 11

12. Study Question 1: What is strategic management?
 Strategy implementation
 The process of allocating resources and
putting strategies into action
 All organizational and management systems
must be mobilized to support and reinforce
the accomplishment of strategies
Management 11e Chapter 9 12

13. Study Question 2: What are the essentials of strategic analysis?
Management 11e Chapter 9 13

14. Study Question 2: What are the essentials of strategic analysis?
 Analysis of mission:
 The reason for an organization’s existence
 Good mission statements identify:
 Customers
 Products and/or services
 Location
 Underlying philosophy
 An important test of the mission is how well it
serves the organization’s stakeholders
Management 11e Chapter 9 14

15. Study Question 2: What are the essentials of strategic analysis?
 Stakeholders
 Individuals and groups directly affected by
the organization and its strategic
accomplishments
 An important test of the mission is how well it
serves the organization’s stakeholders
Management 11e Chapter 9 15

16. Figure 9.3 How external stakeholders can be valued as strategic
constituencies of organizations
Management 11e Chapter 9 16

17. Study Question 2: What are the essentials of strategic analysis?
 Analysis of Core values:
 Broad beliefs about what is
or is not appropriate
 Organizational culture
reflects the dominant value
system of the organization as
a whole
Management 11e Chapter 9 17

18. Study Question 2: What are the essentials of strategic analysis?
 Analysis of objectives:
 Operating objectives direct activities toward
key and specific performance results
Management 11e Chapter 9 18

19. Study Question 2: What are the essentials of strategic analysis?
Management 11e Chapter 9 19

20. Study Question 2: What is the strategic management process?
 Analysis of organizational resources and
capabilities:
 Core competency is a special strength that
gives an organization competitive advantage
 Important goal of assessing core
competencies
Management 11e Chapter 9 20

21. Study Question 2: What is the strategic management process?
Management 11e Chapter 9 21

22. Study Question 2: What is the strategic management process?
 SWOT Analysis
 Examination of an organization’s current
position by looking at
 Internal strengths and weaknesses
 Environmental opportunities and threats
Management 11e Chapter 9 22

23. Figure 9.4 SWOT analysis of strengths, weaknesses, opportunities,
and threats
Management 11e Chapter 9 23

24. Study Question 2: What is the strategic management process?
 Porter’s Model of Five Strategic Forces Affecting
Competition:
Management 11e Chapter 9 24

25. Figure 9.5 Porter’s model of five strategic forces affecting industry
competition
Management 11e Chapter 9 25
Source: Developed from Michael E. Porter, Competitive Strategy (New York: Free Press, 1980).

26. Study Question 3: What are corporate-level strategies and how are
they formulated?
 Corporate-level strategy formulation
 Strategic portfolio planning:
 Portfolio planning seeks the best mix of
investments among alternative business
opportunities
 BCG Matrix analyzes business opportunities according
to market growth rate and market share
Management 11e Chapter 9 26

27. Study Question 3: What are corporate-level strategies and how are
they formulated?
 BCG matrix
 Ties strategy formulation to analysis of
business opportunities according to …
 Industry or market growth rate
 Low versus high
 Market share
 Low versus high
Management 11e Chapter 9 27

28. Figure 9.6 The BCG matrix approach to corporate strategy
formulation
Management 11e Chapter 9 28

29. Study Question 3: What are corporate-level strategies and how are
they formulated?
 BCG matrix — business conditions and
related strategies:
 Stars
 High share/high growth businesses
 Preferred strategy — growth
 Cash cows
 High share/low growth businesses
 Preferred strategy — stability or modest growth
Management 11e Chapter 9 29

30. Study Question 3: What are corporate-level strategies and how are
they formulated?
 BCG matrix—business conditions and
related strategies (cont.):
 Question marks
 Low share/high growth businesses
 Preferred strategy — growth for promising
question marks and restructuring or divestiture for
others
 Dogs
 Low share/low growth businesses
 Preferred strategy — retrenchment by divestiture
Management 11e Chapter 9 30

31. Study Question 3: What are corporate-level strategies and how are
they formulated?
 Growth strategies
 Seek an increase in size and the expansion of
current operations
 Types of growth strategies:
 Concentration strategies
 Grow within the same business area
Management 11e Chapter 9 31

32. Study Question 3: What are corporate-level strategies and how are
they formulated?
 Types of growth strategies continued
 Diversification strategies
 Grow by acquiring or investing in new and
different business areas
 Related diversification
 Unrelated diversification
 Vertical integration
Management 11e Chapter 9 32

33. Study Question 3: What are corporate-level strategies and how are
they formulated?
 Retrenchment and restructuring
strategies:
 Readjusting operations when an organization
is in trouble
 Chapter 11 bankruptcy
 Protects a firm from creditors while
management re-organizes to
restore solvency
Management 11e Chapter 9 33

34. Study Question 3: What are corporate-level strategies and how are
they formulated?
 Types of retrenchment and
restructuring strategies
 Liquidation
 Business closes and sells assets to pay
creditors
 Downsizing
 Decreases size of
operations
Management 11e Chapter 9 34

35. Study Question 3: What are corporate-level strategies and how are
they formulated?
 Types of retrenchment and restructuring
strategies
 Divestiture
 Sells off parts of the organization to refocus
attention on core business areas
 Turnaround Strategy
 Tries to fix specific performance problems
Management 11e Chapter 9 35

36. Study Question 3: What are corporate-level strategies and how are
they formulated?
 Global strategies:
Management 11e Chapter 9 36

37. Study Question 3: What are corporate-level strategies and how are
they formulated?
 Cooperative strategies
 Strategic alliances — two or more
organizations partner to pursue an area of
mutual interest
 Types of strategic alliances:
 Outsourcing alliances
 Supplier alliances
 Distribution alliances
Management 11e Chapter 9 37

38. Study Question 3: What are corporate-level strategies and how are
they formulated?
 Co-opetition – working with rivals on
projects of mutual benefit
Management 11e Chapter 9 38

39. Study Question 4: What are business-level strategies and how are
they formulated?
 Business-level strategy formulation
 Good strategies help achieve above average
returns
 Key question is “How can we best compete
for customers in our market and with our
products or services?”
Management 11e Chapter 9 39

40. Study Question 4: What are business-level strategies and how are
they formulated?
 Porter’s competitive strategies model
 Business-level strategic decisions are driven
by:
 Market scope
 Source of competitive advantage
 Market scope and source of competitive
advantage combine to generate four generic
strategies
Management 11e Chapter 9 40

41. Figure 9.7 Porter’s competitive strategies framework: soft-drink
industry examples
Management 11e Chapter 9 41

42. Study Question 4: What are business-level strategies and how are
they formulated?
 Porter’s generic strategies for gaining
competitive advantage:
 Differentiation strategy
 Cost leadership strategy
 Focused differentiation strategy
 Focused cost leadership strategy
Management 11e Chapter 9 42

43. Study Question 5: What are the foundations for strategy
implementation?
 Strategy implementation
 Must be supported in every aspect of
management
 Planning
 Controlling
 Organizing
 Leading
Management 11e Chapter 9 43

44. Study Question 5: What are the foundations for strategy
implementation?
 Strategic planning failures that hinder
strategy implementation:
 Failures of substance
 Inadequate attention to major strategic planning
elements
 Failures of process
 Poor handling of strategy implementation
 Lack of participation error
 Goal displacement error
Management 11e Chapter 9 44

45. Study Question 5: What are the foundations for strategy
implementation?
 Corporate governance:
 System of control and performance
monitoring of top management
 Done by boards of directors and other major
stakeholder representatives
 Controversies regarding roles of inside
directors and outside directors
 Increasing emphasis on corporate
governance in contemporary businesses
Management 11e Chapter 9 45

46. Study Question 5: What are the foundations for strategy
implementation?
 Strategic control
 Makes sure strategies are well implemented
and that poor strategies are scrapped or
modified
Management 11e Chapter 9 46

47. Study Question 5: What are the foundations for strategy
implementation?
 Strategic leadership
 Inspires people to continually change, refine,
and improve strategies and their
implementation
Management 11e Chapter 9 47

48. Study Question 5: What are the foundations for strategy
implementation?
 Critical tasks of strategic leadership
 Be a guardian of trade-offs
 Create a sense of urgency
 Ensure that everyone understands the
strategy
 Be a teacher
 Be a great communicator
Management 11e Chapter 9 48

49. Chapter 9 Case
 Sony Corporation: An Evolution of
Technology