Strategic management
Lecture 1.
Concepts and process od strategic
management
Schedule
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Sept. 11. Introduction, concepts, process of strategy
Sept. 18. Analysis of the environment
Sept. 25. Resources and capabilities
Oct. 2. Seminar: environment and resource analysis
Oct. 9. Competive advantages, and strategic alternatives
Oct. 16. Seminar: Strategic options
Nov. 6. Stakeholders, and corporate governance
Nov. 13. Portfolio-models, diversification
Nov. 20 Decision, and strategic goals
Nov. 27. Seminar: Stakeholders, and goals
Dec. 4. Implementation of the strategy
Dec. 11. Organization, culture, and change management
Dec. 18 Seminar or exam
Course textbooks
Essential:
Gerry Johnson, Kevan Scholes,
Richard Whittington.
Exploring Corporate Strategy. 7th
ed, 2005
Or any other books from Johnson, and Scholes
Exlporing Corporate Strategy.
Assessment


Written exam (50%)
Workbook: submitt et the end of
the semester (50%)
Strategy
The strategy
is about winning !
The early days …
“Initially strategos refered to a role (a general
in command of an army). Later it came to
mean ‘the art of the general‘, which is to say
the psychological and behavioral skills with
which he occupied the role. By the time of
Pericles (450 BC) it came to mean
managerial skill (administration, leadership
orienta-tion, power). And by Alexander‘s
time (330 BC) it refered to the skill of
employing forces to overcome opposition
and to create a unified system of global
governance“
The strategy and tactics by Clausewitz
The tactics: using the army to win
the battle.
The strategy: using the battles to
win the war.
A Definition of Strategy
Strategy is:
• the direction and scope of an organisation,
• over the long term,
• which achieves advantage for the
organisation,
• through configuration of its resources,
• within a changing environment,
• to meet the needs of markets, and
• to fulfill stakeholder expectations.
The purpose of the strategy?
The strategy are likely to be concerned with scope of an
organization’s activities,
The strategy is to do with the maching of activities of an
organizaton to the environment in which operat
The strategy is also to do with the maching of the
organizaton’s activities to its resource capability,
The strategy have major resource implications for the
organization
The strategy are likely to affect operational decisions,
The strategy will be affected by values and expectations
of those who have power in and around the organizaton,
The strategy likely to affect the long term direction of an
organization
Different types of managerial problem
Important problems: changing of established rules and processes
Urgent problems: maintaining the established rules and processes
Urgent problems
Not urgent problems
Important Crisis management Strategic management
problems
(I really must get around to
(I have to do..)
doing)
Not
important
problems
Tactical
management
Operational
management
(I always seems to get (I’ll probably ende up just
trapped doing..)
doing..)
The difference between the strategic and
operational types of management
Strategic management Operational management
Ambiguity, Complexity,
Non-rutine decisions
Simple modells, and
Routinised decisions
Organization-wide
Operationally specific
Fundamental, and
significant change
Small-scale change
Envirionment or
expectation driven
Resource driven
The difference of the strategic and traditional
approache
Strategic approache
Traditional approache
Concentrate on the
environment
Concentrate on the
company
Built on appraisal of the
market and competition
Built on appraisal of the
past achievement of the
company
Aims to continue of the
past trends
Aims to utilize of the
competitive advantages
1
The Process View: Competitive Strategy
as a Sequence of Steps that may overlap
Tasks :
Competitive & Industry
Analysis
Key Questions ...
Where do we stand ?
Strategy formulation
Where do we want to go ?
Implementation and
Control
How do we get there ?
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Basic model of the strategic management process
Strategic
analysis
Strategic
choice
Strategy
implementation
The strategic analysis
The strategic analysis is concerned with
understanding the strategic position of an
organizaton.
The main factors of the strategic analysis:
organization.



The environment: provide on one hand threats upon the
firm, and the same environment provide opportunities.
The resources: provide tools to ansvere the environmantal
challenges, and determine strengths and weaknesses of the
organizations,
Culture and expectations: determine values and
expectations of those who have power in and around the
organizaton,
The strategic choice and decision
The strategic choice is concerned with the strategic
options, and a series of strategic decisions.
The main factors of the strategic choice:
 Identifying and generating strategic options,
 Evaluate of the strategic options in the context of
the strategic analysis to assess their relaitive
merits
 Selection of new strategy, selectiong those option
which the organization (and the main
stakeholders) will pursue
The strategic implementation
The strategic implementation is concerned with the
translation of strategy into action, projects, and
programms.
The main factors of the implementation process:
 Planning and allocating resources, and set up the
controll systems
 Re-form the organizational structure, design a
new culture if it needs.
 Managing strategic change
Strategy development routes
Strategy
as outcome
(of cultural and
political processes)
Intended
strategy
Imposed
strategy
Realised
strategy
Unrealised
strategy
Patterns of strategy development
Continuity
Incremental
Flux
Transformational
Strategic evolution and consolidation
Strategic decisions eg
Product launch
Acquisition
Divestment
Overseas expansion
Strategies evolve and inform
strategic decisions, which in
turn consolidate strategic
direction
Evolving
strategic
direction
The dynamics of paradigm change
The paradigm
Development
of strategy
Implementation
Corporate
performance
if
unsatisfactory
Step 1
Tighter control
Step 2
Reconstruct or develop
new strategy
Step 3
Abandon paradigm
and adopt a new one
Source: Adapted from P. Grinyer and J.-C. Spender,Turnaround: Managerial recipes for strategic success,
Associated Business Press, 1979, p. 203
Industry and Competitive Analysis - Questions
1
Tasks :
Competitive & Industry
Analysis
("Where do we stand?")
Strategy formulation
("Where do we want
to go ?")
Implementation and
Control
What is our business ?
How do we create value ?
What are our organizational and/or
technological capabilities ?
Who are we in business with ?
How is our business/industry changing ?
What drives this change ?
What are our strengths and weaknesses ?
What opportunities open up, and what threats exist ?
("How do we get there?")
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