Strategic Management and
Entrepreneurship
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A comprehensive plan of action that sets critical direction for an organization and guides the allocation of its resources.
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The process of formulating and implementing strategies.
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Five Strategic Management
Tasks
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Identify organizational mission and objectives.
What are we….what do we want to be……
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Assess current performance vis-à-vis mission and objectives.
How are we doing…...
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Create strategic plans to accomplish purpose and objectives.
How can we get where we want to be…..
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Five Strategic Management
Tasks
• Implement the strategic plans.
Has everything been done that needs to be done….
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Evaluate results; change strategic plans and/or implementation processes as necessary.
Are things working out as planned, and what can be improved upon…...
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The Strategic Management
Process
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–Analysis of the Mission (Purpose)
–Analysis of Values (Corp Culture)
–Analysis of the Organization
(S&W)
–Analysis of the Environment
(O&T)
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Analysis of the Mission
• Usually expressed in the form of a Mission Statement in which it identifies the organization’s official objectives, and it defines the Domain in which the organization intends to operate such as:
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Analysis of the Mission
–the Customer it intends to serve.
–the Products and/or Services to be provided.
–the Location in which it intends to operate.
–the Philosophy that will guide the employees.
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Analysis of the Mission
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What is the organization’s commitment to it’s stakeholders:
Employees, Stockholders,
Suppliers, Creditors,
Communities
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Analysis of Core Values
The broad based beliefs about what is or is not appropriate.
The predominate value system for the organization.
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Analysis of Core Values
• Through corporate cultures, the values of managers and other individuals are shaped and pointed in common directions.
• It defines the character of an organization to both itself and its external stakeholders.
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Analysis of Objectives
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– Direct activities toward key and specific results.
– Shorter term targets against which actual performance results can be measured as indicators of progress and continuous improvement.
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Analysis of Objectives
– Profitability
– Market
Standing
– Human
Resources
– Quality
– Social
Responsibility
– Cost Efficiency
– Financial
Resources
– Innovation
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Internal Assessment of the Organization
Strengths?
Weaknesses?
• Mfg’ing Efficiency
• Skilled Workforce
• Good Market
Share
• Strong Financing
• Superior
Reputation
• Outdated Facilities
• Inadequate R&D
• Obsolete Tech
• Weak Management
• Past Planning Failures
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External Assessment of the Environment
Opportunities?
Threats?
• New Markets
• Strong Economy
• Weak Rivals
• Emerging Tech.
• Growth of Market
• New Competition
• Shortage of
Resources
• Changing Mkt Taste
• New Regulations
• Substitute Products
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Levels Of Strategy
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Corporate
Sets the overall strategic direction.
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Business
Sets the strategic direction for a single division or strategic business unit (SBU ).
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Functional
Sets functional directions for supporting business and corporate strategies. A strategy that guides activities within specific functional areas.
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Types of Strategies
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Seeking greater size and the expansion of current operations.
This objective can be pursued in a number of different ways through two basic strategies:
Concentration and Diversification
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Types of Strategies
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Sometimes called defensive strategies, involves decisions to reduce operations and cut back in order to gain efficiencies and improve performance.
There are three basic approaches:
Turnaround - Divestiture Liquidation
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Types of Strategies
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Maintains the present course of action without commitment to any major operating changes.
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Typically pursued when an organization is doing well in a receptive environment, when low risk is important ….. and/or when time is needed to consolidate strengths …….
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Types of Strategies
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Simultaneously employs more than one of the other strategies.
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This often reflects different strategic approaches among subsystems.
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Strategy Formulation Models
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Seeks the best mix of investments among alternative business opportunities.
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It is most useful for addressing corporate-level strategy in multibusiness or multiproduct situations.
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Strategy Formulation Models
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A Portfolio planning approach offered by the Boston Consulting Group.
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It ties strategy formulation to an analysis of business opportunities according to Market Growth Rate and
Market Share.
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Strategy Formulation Models
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It ties strategy formulation to four possible business states:
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Stars - High share/high growth
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Cash Cows - High share/low growth
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Question Marks - Low share/high growth
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Dogs - Low share/low growth
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This approach begins with an analysis of an organization's competitive environment.
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He identifies five strategic forces affecting industry competition:
Customers - Suppliers - New Entrants
Substitute Products - Industry Competitors
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Strategy Formulation Models
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Next Porter identifies three generic strategies that organizations may pursue to gain strategic advantage:
Product Differentiation
Cost Leadership
Focus
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Strategy Formulation Models
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Organizations should pursue product/market strategies that are congruent with the nature of their external environments.
– Prospector Strategies - Taking risk, seeking opportunities, innovation, and growth.
– Defender Strategy - Avoiding change, seeking stability and perhaps retrenchment.
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Strategy Formulation Models
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Analyzer Strategy - Maintaining stability, while exploring limited innovation.
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Reactor Strategy - Responding to events, but without a guiding strategy.
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Strategy Formulation Models
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A series of stages a product or service goes through in the life of it marketability.
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Introduction
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Growth
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Maturity
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Decline

Suggests that different business strategies should be used to support products in different stages of their life.
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Strategy Implementation
The Incremental-Emergent View
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Not all strategies are clearly formulated at one point in time and then implemented step-by-step.
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They take shape, change, and develop over time as modest adjustments to past patterns.
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It is called Logical Incrementalism in which incremental changes in strategy occur as managers learn from experience.
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Strategy Implementation
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• Failures of Substance
Reflects a lack of attention to the major strategic planning elements.
• Failure of Process
Reflects poor handling of the ways in which the various aspects of strategic planning were accomplished.
•Insufficient Participation Error
•Goal Displacement
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A term used to describe risktaking behavior that results in the creation of new opportunities for individuals and/or organizations.
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• Internal Locus of Control
• High Need for Achievement
• Tolerance for Ambiguity
• Self-Confidence
• Action-Oriented
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Businesses depend on entrepreneurial managers willing to assume risk and encourage the creativity and innovation so important to continued success.
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Intrapreneurship
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Skunk works
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