Strategic Management Principles & Practice
Dr. Khaled Bekhet
Strategic Management Essentials
Chapter (1)
Today’s Agenda
Introduction
Review Syllabus
Other Administrative Details
Overview of the Course
Session chapters
Dr. Khaled Bekhet, DBA, M.Phil., MBA
-Instructor and Trainer at the American University in Cairo
-Adj. Assistant Professor of Strategy at ESLSCA Business School in Egypt
-Former Assistant professor, College of Business, Antalya Intl. University (AIU), Turkey
Course Outline
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“This course provides an opportunity for practicing business
skills in real world. It focuses on working effectively in groups
through the creation of a quality Strategic Plan to learn how to
act as a consultant to help corporations with developing and
implementing business plans. This course explores a foundation
to attain competency in conceptual skills; problem solving, and
decision making skills in the business world, business functions,
organizational structure, and policy implementation and
evaluation. A significant aspect of the course is devoted to
assessing the competitive dynamics of firms.”
Course Learning Outcomes
1. Develop an understanding of the process of analyzing the
2.
3.
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external and internal environment, deriving, selecting and
implementing business strategies in an organization.
Apply the strategic management process to real life business
cases, including current world/business news, and develop
recommendations to help firms create and sustain competitive
advantage.
Master the use of specific tools to analyze the environment,
derive and select specific strategies for an organization.
Improve written and oral communication skills through the
use of team and individual assignments.
Classes and Communication
 Course ID: Strategic Management
 Course Name: Strategic Management
 Class Room: ESLSCA Campus- Room--- E-mail: kbekhet@gmail.com
 Phone: +201001502249
 Course Time:
 Course Days:
 Course Duration:
Assessment Strategy
Lectures: 1 session/week
Determination of Grades
Value
Attendance & Participation
10 Points
Midterm Exam (Chapter 1 & 2,3, 4and 5)
20 points
Personal Strategic/Development Plan
Strategic Audit Report+ Presentation
Case P & G
10 Points
Final Exam (Chapters 6, 7, 8, 9 and10)
30 points
.
Total
30 points
100 P
Class Policy & Etiquette
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Come to class on time and don’t walk out early.
Turn off your cell phone, PC, I pad …..etc.
Don’t talk amongst yourselves, read the
newspaper, or eat during lecture.
Do ask questions and ask me to slow down if I
am going too fast or the material is not clear.
Do help out the class by initiating and
participating in class discussion.
Read textbook before class, review after.
Chapter Objectives
1.
Describe the strategic-management process.
2. Explain the need for integrating analysis and intuition in
strategic management.
3. Define and give examples of key terms in strategic
management.
4. Discuss the nature of strategy formulation, implementation,
and evaluation activities.
5. Describe the benefits of good strategic management.
6. Discuss how a firm may achieve sustained competitive
advantage.
Strategic Management Definition
Defining Strategic Management
Strategic management
 the art and science of formulating, implementing,
and evaluating cross-functional decisions that
enable an organization to achieve its objectives
Strategic Management Definition
Strategic management is used synonymously with the
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term strategic planning.
Sometimes the term strategic management is used to refer to
strategy formulation, implementation, and evaluation, with
strategic planning referring only to strategy formulation.
Strategic Management Plan
Defining Strategic Management
A strategic plan is a company’s game plan.
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A strategic plan results from tough managerial choices
among numerous good alternatives, and it signals
commitment to specific markets, policies, procedures, and
operations.
Stages of Strategic Management
Strategy
formulation
Strategy
implementation
Strategy
evaluation
Stages of Strategic Management
Strategy formulation
 includes developing a vision and mission, identifying
an organization’s external opportunities and threats,
determining internal strengths and weaknesses,
establishing long-term objectives, generating
alternative strategies, and choosing particular
strategies to pursue.
Strategy Formulation
 Deciding what new businesses to enter
 What businesses to abandon
 How to allocate resources
 Whether to expand operations or diversify
 Whether to enter international markets
 Whether to merge or form a joint venture
 How to avoid a hostile takeover
Strategy Implementation
Stages of Strategic Management
Strategy implementation
 requires a firm to establish annual objectives,
devise policies, motivate employees, and
allocate resources so that formulated strategies
can be executed
 often called the action stage
Strategy Evaluation & Control
Stages of Strategic Management
Strategy Evaluation & Control
 Strategic evaluation and control is the process of
determining the effectiveness of a given strategy in
achieving the organizational objectives and taking
corrective actions whenever required. Control can
be exercised through formulation of contingency
strategies and a crisis management team.
Keys of SWOT Analysis
Key Terms in Strategic Management
 Internal strengths and internal weaknesses
 an organization’s controllable activities that are
performed especially well or poorly
 determined relative to competitors
Some Opportunities and Threats
Computer hacker problems are increasing.
Intense price competition is plaguing most firms.
Unemployment and underemployment rates remain high.
Interest rates are rising.
Product life cycles are becoming shorter.
State and local governments are financially weak.
Key Terms in Strategic Management
Vision statement
 answers the question “What do we want to
become?”
 often considered the first step in strategic planning
Key Terms in Strategic Management
Mission statements
 enduring statements of purpose that distinguish
one business from other similar firms
 identifies the scope of a firm’s operations in product
and market terms
 addresses the basic question that faces all
strategists: “What is our business?”
Key Terms in Strategic Management
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Key Terms in Strategic Management
Objectives
 specific results that an organization seeks to
achieve in pursuing its basic mission
 long-term means more than one year
 should be challenging, measurable, consistent,
reasonable, and clear
Key Terms in Strategic Management
Key Terms in Strategic Management
 Strategies
 the means by which long-term objectives will be
achieved
 may include geographic expansion,
diversification, acquisition, product
development, market penetration,
retrenchment, divestiture, liquidation, and joint
ventures
Key Terms in Strategic Management
Key Terms in Strategic Management
 Annual objectives
 short-term milestones that organizations must
achieve to reach long-term objectives
 should be measurable, quantitative, challenging,
realistic, consistent, and prioritized
 should be established at the corporate, divisional,
and functional levels in a large organization
Key Terms in Strategic Management
Key
Terms
in
Strategic
Management
 Policies
 the means by which annual objectives will be
achieved
 include guidelines, rules, and procedures
established to support efforts to achieve stated
objectives
 guides to decision making and address
repetitive or recurring situations
The Strategic-Management Model
Where are we now?
Where do we want to go?
How are we going to get there?
A Comprehensive Model of Strategic-Management
Benefits of Strategic Management
Benefits of Strategic Management
Historically, the principal benefit of strategic
management has been to help organizations formulate
better strategies through the use of a more systematic,
logical, and rational
approach to strategic choice.
Communication is a key to successful strategic management
Through dialogue and participation, managers and
employees become committed to supporting the organization
Financial Benefits
Businesses using strategic-management
concepts show significant improvement in sales,
profitability, and productivity compared to firms
without systematic planning activities
High-performing firms seem to make more
informed decisions with good anticipation of
both short- and long-term consequences
Nonfinancial Benefits
 Enhanced awareness of external threats,
 Improved understanding of competitors’ strategies,
 Increased employee productivity,
 Reduced resistance to change,
 Increased discipline
 Enhanced communication
 Improved decision-making
 Increased synergy
 Effective allocation of time and resources
Why Some Firms Do No Strategic Planning
 Lack of knowledge in strategic planning
 Poor reward structures
 Firefighting
 Waste of time
 Too expensive
 Laziness
 Content with success
 Overconfidence
 Prior bad experience
Pitfalls in Strategic Planning
 Doing strategic planning only to satisfy accreditation
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or regulatory requirements
Too hastily moving from mission development to
strategy formulation
Failing to communicate the plan to employees, who
continue working in the dark
Top managers making many intuitive decisions that
conflict with the formal plan
Top managers not actively supporting the strategicplanning process
Guidelines for Effective Strategic Management
The Strategic Audit: Aid to Strategic
Decision Making
Strategic audit
 provides a checklist of questions, by area or issue, that
enables a systematic analysis to be made of various
corporate functions and activities
© Pearson Education Limited 2015
1-36
REVIEW QUESTIONS
Questions-Choose one Best Answer
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1) During what stage of strategic management are a firm's specific internal
strengths and weaknesses determined?
A) Formulation
B) Implementation
C) Evaluation
D) Feedback
E) Goal-setting
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2) Which phase of strategic management is called the action phase?
A) Strategy formulation
B) Strategy implementation
C) Strategy evaluation
D) Allocating resources
E) Measuring performance
Questions-Choose one Best Answer
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3) ________ and ________ are external forces transforming business and society
today.
A) Online social networking; strategy
B) Online social networking; high energy prices
C) Strategy; high energy prices
D) Corporate culture; stakeholders
E) Stakeholders; strategy
4) The fact that Apple has no manufacturing facilities of its own
A) has caused it to build up massive debt on its balance sheet.
B) has enabled it to remain financially lean with virtually no long-term debt.
C) has been problematic for Apple in terms of debt.
D) illustrates that having more fixed assets than rival firms can provide major
competitive advantages in a global recession.
E) means that it is in the same position as Sony.
Questions-Choose one Best Answer
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5) An organization's vision statement
A) is a constant reminder to its employees of why the organization exists.
B) broadly charts the future direction of an organization.
C) addresses the basic question: "What is our business?"
D) answers the question: "What do we want to become?"
E) none of the above
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6) Usually, external opportunities and threats are
A) uncontrollable by a single organization.
B) controlled by governments.
C) not as important as internal strengths and weaknesses.
D) key functions in strategy implementation.
E) key functions in strategy exploitation.
Questions-Choose one Best Answer
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7) Long-term objectives should be all of the following EXCEPT
A) measurable.
B) continually changing.
C) reasonable.
D) challenging.
E) consistent.
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8) What are the means by which long-term objectives will be achieved?
A) Strategies
B) Strengths
C) Weaknesses
D) Policies
E) Opportunities