Ch1Case1-Group4

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Strategic Management
Chapter 1
Basic concept of strategic Management
Presented to: Dr.Ashraf EL Safty
Presented by:
Ahmed Youssef Ibrahim
Ahmed Mohamed Abdelaziz
Hady Kiryakos
Mahmoud Nasreldin Qamar
Shereen Anwar Sobhi
Group:55D –smart Village
Strategic Management
- A Set of managerial decisions decisions and actions that determines the long run performance of a
corporation, Includes environmental scanning (both external and internal), strategy formulation (strategic or
long-range planning), strategy implementation, and evaluation and control.
- The Phases of strategic management:
 Basic financial planning:
The serious planning initiated when the managers requested to purpose the following year’s budget.
The projects are proposed with little analysis phase with most information provided from the firm.
 Forecast-Based Planning:
for long term planning, Managers attempt to propose five-year plans. At this point they
consider projects that may take more than one year. In addition to internal information, managers gather any
available environmental data. This phase is also time consuming, often involving a full month of managerial
activity to make sure all the proposed budgets fit together. The process gets very political as managers
compete for larger shares of funds.
 Externally oriented (strategic) planning:
The control of the planning process usually take by initiating strategic planning. The company
seeks to increase its responsiveness to changing markets and competition by thinking strategically. Planning is
taken out of the hands of lower-level managers and concentrated in a planning staff whose task is to develop
strategic plans for the corporation. Top management typically develops five-year plans with help from
consultants but minimal input from lower levels.
Strategic management
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Strategic Management
Strategic management:
Without the input and commitment of lower-level managers the best strategic plan will be worthless,
Top management forms planning groups of managers and key employees at many levels, from various
departments and workgroups. They develop and integrate a series of strategic plans aimed at achieving the
company’s primary objectives.at this point strategic plan will be the implementation, evaluation, and control
issues. Planning is typically interactive across levels and is no longer top down. People at all levels are now
involved.
General Electric, one of the pioneers of strategic planning, led the transition from strategic planning to strategic
management during the 1980s.8 By the 1990s, most other corporations around the world had also begun the
conversion to strategic management.
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Benefits of Strategic Management
 Clearer sense of strategic vision for the firm.
 Sharper focus on what is strategically important.
 Improved understanding of a rapidly changing environment.
A recent survey by McKinsey & Company of 800 executives found that formal strategic planning processes
improve overall satisfaction with strategy development.15 To be effective, however, strategic management
need not always be a formal process. It can begin with a few simple questions:
1. Where is the organization now? (Not where do we hope it is?)
2. If no changes are made, where will the organization be in one year? two years? five years? 10
years? Are the answers
acceptable?
3. If the answers are not acceptable, what specific actions should management undertake?
What are the risks and payoffs involved?
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Impact of globalization
Strategic management is becoming an increasingly important way to keep track of international developments
and position a company for long-term Competitive advantage.
IMPACT OF ENVIRONMENTAL SUSTAINABILITY:
it refers to the use of business practices to reduce a company’s impact upon the natural, physical environment.
Climate change is playing a growing role in business decisions. We can grouped the effects of climate change
on industries and companies into six categories,(regulatory risk, supply chain risk, product and technology risk,
litigation risk, reputational risk, and physical risk.
Creating a Learning Organization:
Strategic flexibility demands a long-term commitment to the development and nurturing of critical resources.
Learning organizations are skilled at four main activities:
Solving Problem systemically.
 Experimenting with new approaches.

 Learning from their own experiences and past history as well as from the experiences of others
 Transferring knowledge quickly and efficiently throughout the organization
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Basic Model of Strategic Management
ESLSCA 2018
Basic Model of Strategic Management
 Environmental scanning:
The monitoring, evaluating, and disseminating of information from the external and internal
environments to key people within the corporation. The simplest way to conduct environmental scanning is
through SWOT analysis. It used to describe the particular Strengths,Weaknesses,Opportunities, and Threats
that are strategic factors for a specific company.
 STRATEGY FORMULATION:
the development of long-range plans for the effective management of environmental opportunities
and threats, in light of corporate strengths and weaknesses (SWOT). It includes defining the corporate mission,
specifying achievable objectives, developing strategies, and setting policy guidelines.
Mission: the reason for the organization’s existence.
Objectives: the end result of planned activity.
Strategies: A strategy of a corporation forms a comprehensive master plan that states how the
corporation will achieve its mission and objectives
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Basic Model of Strategic Management, type of strategies
(Corporate, business, and functional)
 Corporate Strategy:
describes a company’s overall direction in terms of its general attitude toward growth and the management
of its various businesses and product lines.
 Business Strategy:
Usually occurs at the business unit or product level, and it emphasizes improvement of the
competitive position of a corporation’s products or services in the specific industry or market segment served by
that business unit.
 Functional strategy:
the approach taken by a functional area to achieve corporate and business unit objectives and
strategies by maximizing resource productivity.
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Basic Model of Strategic Management
 STRATEGY IMPLEMENTATION
process by which strategies and policies are put into action through the development of programs,
budgets, and procedures.
o A program: statement of the activities or steps needed to accomplish a single-use plan.
o A Budget: statement of a corporation’s programs in terms of money.
o Procedures (SOP): system of sequential steps or techniques that describe in detail how a particular
task or job is to be done.
 Evaluation and control:
process in which corporate activities and performance results are monitored so that actual performance
can be compared with desired performance.
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WHAT MAKES A DECISION STRATEGIC
 Characteristics of strategic decisions:
-Rare: Strategic decisions are unusual and typically have no precedent to follow.
-Consequential: Strategic decisions commit substantial resources and demand a great deal of
commitment from people at all levels.
-Directive: Strategic decisions set precedents for lesser decisions and future actions throughout an
organization.
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Case Study 1:
The Recalcitrant Director at Byte Products, Inc.
CORPORATE LEGALITY VERSUS CORPORATE RESPONSIBILITY
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Byte Products, Inc.
-Electronic Components.
-Total Sales $ 265 Million.
-Revenue increased by 12 %
-Headquartered in the Midwestern United States.
-Market share 32%.
-Three manufacturing plants operates three production shifts (24 hours per day), 7 days a week.
Challenges:
Increase in demand
New entrants
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The Solution
-One recommendation that has come to the attention of the Chief Executive Officer could help solve Byte’s
problem in the short run. Certain members of his staff have notified him that an abandoned plant currently is
available in Plainville, a small town in the northeastern United States.
Advantages:
-Attractive price availability
-Ready in short term (Three Months)
-Immediate lease
-Quality Control
-Not need for licenses
-no change in the product price.
Disadvantages:
-Low profitability
-inventory expense
-inefficiency
-High labor cost
-Transportation issue (Market &Supply).
Recommendations
- Declare the temporary status of Plainville plant and assist labor in the form of housing or credit in addition of
offering permanent jobs at the new plant for workers willing to relocate.
- Plainville temporary plant should used as permanent location in addition to the new plant originally planned
in order to fulfill any extra future demands and avoiding any issues related to labor and community rights
-Temporary manufacturing location near the current facilities which is allow the labor to find a permanent
employment opportunity in the nearby new plant.
Analysis:
-long term plan offered not recommend the effective solution for the current crisis
-inefficient planning result in offer establish new plant which will take three years to operate although the
current facilities are at full capacity and already faced shortages.
- Due to lack of proper planning average Environmental scanning has performed to recognize competition,
information has not been used in appropriate timing.
- Poor Environmental scanning has performed in terms of Societal Environment and the impact of the
temporary plant on the destined location.
-Not meeting customer’s-demand which translate the poor forecast-based-planning.
ESLSCA 2018
Thanks you
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