MODULE 2
• MODULE 2
THE THREE
STRATEGY-MAKING
TASKS
MODULE OUTLINE
Developing a Strategic Vision & Mission
Establishing Financial & Strategic
Objective
Crafting a Strategy
Factors Shaping a Company’s Strategy
Linking Strategy With Ethics
Tests of a Winning Strategy
Approaches to Performing Strategy
Making Task
DEVELOPING A VISION & MISSION
First Direction –Setting Task
Forming a VISION involves
UNDERSTANDING what business firm
is in clear, exciting, & inspiring ways.
DECIDING when to alter firm’s strategic course
& Change mission
CHARACTERISTICS OF A
STRATEGIC VISION & MISSION
A STRATEGIC VISION
Identifies activities firm intends to pursue
Set forth long-term direction
Provides big picture perspective of
Who WE are, what WE do, where
WE are headed
A MISSION STATEMENT should
Set firm apart from others
Arouse strong sense of organizational
identity & business purpose
CHARACTERSITICS OF A STRATEGIC
VISION & MISSION
Strategic leadership states with
Concept of what a firm SHOULD &
SHOULD NOT do
VISION of where a firm needs to be headed
EXAMPLE OF A STRATEGIC VISION
DELTA AIRLINES
……. We want Delta to be the WORLDWIDE
AIRLINE OF CHOICE
EXAMPLE OF A STRTEGIC
VISION
DELTA AIRLINES
WORLDWIDE, because we are and intend
to remain an innovative, aggressive, ethical,
The world at the highest standard of customer
service . We will continue to look for
Opportunities to extend our reach through new
Routes and creative global alliances.
EXAMPLE OF A STRTEGIC
VISION
DELTA AIRLINES
AIRLINE, because we intend to stay in the
business we know best – air transportation
and related services. We won’t stray from our
Roots.
We believe in the long-term prospects
For profitable growth in the airline industry ,
and we will continue to focus time, attention,
and investment on enhancing our place in that
business environment.
EXAMPLE OF A STRATEGIC VISION
DELTA AIRLINES
OF CHOICE, because we value the loyalty
of passengers and shippers, we will continue to Provide
the best service and value. For our personnel, we
Will continue to offer an ever more challenging, rewarding,
and result-oriented workplace r\that recognizes and
appreciates their contributions. For our shareholders, we
will earn a consistent, superior financial return.
DEFINING A COMPANY’S BUSINESS
Looking OUTWARD at customer needs makes the
Business definition
CUSTOMER-DRIVEN
MARKET-DRIVEN
Looking INWARD at technologies & function
indicates scope of firm’s operations
SPECIALIZED
FULLY INTERGRATED
PARTIALLY INTEGRATED
DEFINING A COMPANY’S BUSINESS
Three factors to consider
Customer needs—WHAT is being satisfied
Customer groups – WHO is being satisfied
Technologies used & functions performed—
HOW customer needs are satisfied
ESTABLISHING OBJECTIVES
Second Direction –Setting Task
Objectives
Represent managerial commitment to achieve
SPECIFIC & MEASURABLE PERFORMANCE
TARGETS by a certain time
Spell-out HOW MUCH of WHAT KIND of
performance BY WHEN
Direct attention & energy to WHAT NEEDS TO
BE ACCOMPLISHED
Establishing objectives converts firm’s
Mission into concrete performance outcomes!
BROAD OR NARROW
MISSION STATEMENTS?
A well-crafted mission statement
Must be narrow enough to specify real of interest
Serves as boundary for what for what to do & not do
Serves as beacon of where top management intends to
take firm
Overly broad mission statements provide no practical guidance in
strategy-making—
THEY DON’T HELP MANAGERS MANAGE!
Diversified companies have broader business definitions than
single business enterprise
EXAMPLE: MISSION STATEMENT
OF DIVERSIFIED FIRM
Alcan is determined to be the most innovative
diversified aluminum company in the world.
To achieve –oriented enterprise committed
to excellence and lowest cost in its chosen
aluminum businesses, with significant
resources devoted to building an array of
new businesses with superior growth and
profit potential.
EXAMPLE: MISSION STATEMENT
OF DIVERSIFIED FIRM
Times Mirror is a media and
information company principally
engaged in newspaper publishing;
book, magazine and other publishing;
and cable and broadcast television
EXAMPLE: MISSION STATEMENT
OF DIVERSIFIED FIRM
At John Hancock, we are determined not just to
compete but to advance, building our market share
By offering individuals and institutions the broadest
Possible range of products and services. Apart from
insurance, John Hancock encompasses banking
products, full brokerage services and institutional
Investment, to cite only a few of our diversified acti
MISSION STATEMENT FOR
FUNCTIONAL DEPARTMENTS
Functional area mission statements spotlight
Department’s CONTRIBUTION to firm’s
mission
Department’s ROLE & SCOPE within firm
DIRECTION which department needs to be
moving
EXAMPLES: MISSION STATEMENTS
OF FUNCTIONAL DEPARTMENTS
To contribute to organizational success by
developing effective leaders, creating high
performance teams, and maximizing the potential
of individuals.
To minimize the overall cost of liability, workers
compensation and property damage claims
through competitive cost containment techniques
and loss prevention and control programs.
COMMUNICATING THE VISION
COMMUNICATING an exciting vision can
inspire, challenge,& motivate workforce
Arouse strong sense of organizational purpose,
build pride, & induce employee buy-in
Bring workforce together, galvanize people
to act, & cause people to live the business
The BEST-WORKED mission statements
Are simple & concise
Speak loudly & clearly
Generate enthusiasm for firm’s future
EXAMPLES: MISSION STATEMENTS
OF FUNCTIONAL DEPARTMENTS
To contribute to organizational success by
developing effective leaders, creating high
performance teams, and maximizing the potential
of individuals.
To minimize the overall cost of liability, workers
compensation and property damage claims
through competitive cost containment techniques
and loss prevention and control programs.
ROLE OF ENTREPRENEURSHIP:
CHANGING THE MISSION
Entrepreneurial Challenge –knowing when
events require revising mission to avoid
Getting trapped in a stagnant core business
or
Letting new growth opportunities slip away
Good strategy-makers are alert to
Shifting customer wants & needs
Emerging technological capabilities
Changing international trade conditions
Signs of growing or shrinking opportunities.
MANAGERIAL VALUE OF A
STRATEGY VISION & MISSION
CRYSTALLIZES top management’s view of
firm’s long-term direction
Help managers AVOID visionless or rudderless
decision-making
Conveys ORGANIZATIONAL PURPOSE
motivating employee to do their very best
Helps Keep direction-related actions of lowerlevel managers on common path.
A well-chosen mission prepares
A company for the future!
ESTABLISHING OBJECTIVES
Second Direction – Setting Task
Objectives
Represent managerial commitment to achieve
SPECIFIC & MEASURABLE PERFORMANCE
TARGETS by a certain time
Spell-out HOW MUCH of WHAT KIND of
Performance BY WHEN
Direct attention & energy to WHAT NEEDS TO
BE ACCOMPLISHED
Establishing objectives converts firm’s
Mission into concrete performance outcomes!
MANAGERIAL VALUE OF
OBJECTIVES
Objectives serve two purposes
Substitute strategic decision-making for
aimlessness over what to accomplish
Provide benchmarks for judging
organizational performance
MANAGERIAL VALUE OF
OBJECTIVES
Principal
Companies whose managers set objectives for
each KEY RESULT AREA & then aggressively pursue
actions calculated to achieve their performance targets
typically outperform companies whose managers have
Good intentions, try hard, and hope for success!
WHAT KIND OF OBJECTIVES
TO SET
Required for Every Key Result Area
Financial OBJECTIVES
Relate to firm’s financial performance
Acceptable financial performance is critical to
firm’s Survival
STRATEGIC OBJECTIVES
Relate to firm’s competitiveness & market position
Tend to be competitor focused
Acceptable strategic performance is essential for
long-term competitive success
WHAT FOR BOTH
OBJECTIVES TO SET
Required for Both Short & Long Term
SHORT – RUN
OBJECTIVES
Focus on short-term
Performance
LONG-RUN
OBJECTIVES
Focus on long-term
Performance
STRATEGIC MANAGEMENT
PRINCIPLE
Every company needs
both strategic and
financial objectives!
EXAMPLE : CORPORATE OBJECTIVES
McDonald's
To achieve 100 percent total customer
satisfaction … everyday … in every
restaurant … for every customer.
EXAMPLE : CORPORATE OBJECTIVES
Rubbermaid
To increase annual sales from $1 billion to $2
billion in 5 years.
To enter a new market every 18 to 24 months.
To have 30% of sales each year come from products
not in the company’s product line five years earlier.
To be the lowest cost, highest quality producer in the
household products industry.
To achieve a 15% average annual growth in sales,
profit, and earnings per share.
STRATEGIC VS. FINANCIAL
OBJECTIVES
Pressures to opt for better near-term financial
Performance are pronounced when
Firm is struggling financially
Resource commitments for strategic moves
will detract from bottom-line.
A firm passing up opportunities to strengthen longterm gains for near-term financial gains risks
Diluting its competitiveness
Losing momentum in its markets
Impairing its ability to stave off rivals’ challenges
STRATEGIC MANAGEMENT
PRINCIPLE
Pursuing the strategic objective of building
a stronger long-term competitive position
Benefits shareholders more lastingly than
Pursuing the financial objectives of improving
short-term profitability
EXAMPLE : FINANCIAL
OBJECTIVES
Achieve revenue growth of 10% per year
Increase earnings by 15% annually
Increase dividends per share by 5% per year
Increase net profit margins 2% to 4%
Boost annual returns on invested capital from 15%
to 20%
Stronger bond and credit ratings
Recognition as a “ blue chip “ company
A more diversified revenue base
Stable earnings during re cessionary periods.
EXAMPLE : STRATEGIC
OBJECTIVES
A bigger market share
Lower costs relative to key competitors
Broader or more attractive product line than
rivals
Recognition as a leader in technology
and/or product innovation
Ability to compete in international markets
A higher, more secure industry rank
CONCEPT : STRATEGIC INTENT
Basic Concept
A company exhibits STRATEGIC INTENT when
it relentlessly pursues A certain long-term strategic
objectives and concentrates its strategic actions
on achieving that objective
CONCEPT : STRATEGIC INTENT
Strategic objectives indicate firm’s strategic
Intent to STAKE OUT a particular position
TIME HORIZON of strategic intent is LONGTERM
A firm’s strategic intent
Serves as PALLYING CRY for
employee to do their very best
signals deep-seated COMMITMENT to
winning
CONCEPT : STRATEGIC INTENT
A capably managed company steadfastly
committed to achieving strategic objectives
well beyond its present reach and resources
Is potentially a more formidable competitor
Than company with modest strategic intent!
OBJECTIVES NEED TO BE
TIME -BASED
SHORT – RUN objectives
Performance targets to be achieved soonUsually this year or next
LONG-RUN objectives
Performance targets to be achieved later
- Within 3 to 5 years
SHORT – RANGE & LONG-RANGE
OBJECTIVES
SHORT-RANGE objectives
Spell out near –term result to achieve
Indicate SPEED of progress & LEVEL
OF PERFORMANCE being aimed for
serve as START STEPS for reaching longrange performance
LONG-RANGE objectives
Prompt actions NOW that will permit reaching
targeted long-range performance LATER
PUSH managers to weigh impact of today’s
decisions on future performance
STRATEGIC
MANAGEMENT PRINCIPLE
For the establishment of objectives to have
value as a management tool, they must be
STATED in QUANTIFIABLE terms and
specify a DEADLINE FOR
ACHIEVEMENT!
ALL MANAGERS NEED
OBJECTIVES
The process is TOP-DOWN
Start with ORGANIZATION-WIDE objectives
Next, set BUSINESS & PRODUCT LINE
objectives
Then, establish FUNCTIONAL AREA &
DEPARTMENT objectives
INDIVIDUAL objectives come last
STRATEGIC MANAGEMENT
PRINCIPLE
OBJECTIVES – setting should be a
top- down process In order to achieve UNITY
and COHESION Throughout the organization!
THREE RULES FOR
STATING OBJECTIVES
Spell out QUANTIFIABLE or MEASURABLE
TERMS
Specify DEADLINE for achievement
Be CHALLENGING but ACHIEVABLE
RULE FOR STATING OBJECTIVES
Setting challenging but achievable
objectives requires managers to judge what
performance is POSSIBLE in light of
external conditions against what
performance the organization is CAPABLE
Of achieving when pushed!
WHY HAVE PERFORMANCE
OBJECTIVES?
Two reasons
To substitute purposeful, strategic
decision – making for aimless actions over
what to accomplish
To provide benchmarks for judging just
how good firm’s actual strategic
performance turns out to be
PRINCIPLE
Companies whose managers set objectives
for each key result area and then
aggressively pursue actions calculated to
achieve their performance targets are strong
candidates to outperform companies whose
managers operate with hopes, prayers, and
good intentions!
EXAMPLES: STRATEGIC
OBJECTIVES
To continue global expansion by providing
Service to additional countries, increasing
number of flight destinations, expanding
fleet of aircraft, adding new hubs, adding
U.S. distribution gateways, and merging
dissimilar networks.
To be the lowest cost producer of aluminum.
EXAMPLES: STRATEGIC
OBJECTIVES
To become the most competitive enterprise in
the world by being # 1 or #2 in market share
in every the company is in.
To become a low-cost, medium-size gold
producer, producing in excess of 125,000
ounces of gold a year and building gold
reserves of 1,500,000 ounces.
EXAMPLES : STRATEGIC
OBJECTIVES
To be a low-cost producer of the highest
quality products and services that provide
the best customer value.
To be the world’s best in chemical and
electronic imaging.
EXAMPLES: STRATEGIC
OBJECTIVES
To offer4 the best possible personal
computing technology. To put technology in
the hands of as many people as possible.
To be a leading marketer of strong consumer
brands and improve the profitability of low
return businesses or divest them.
CRAFTING A STRATEGY
Third Direction-Setting Task
Basic Concept
A firm’s STRATEGIC consists of combine
Actions management has taken & intends
To take in
Achieving strategic & financial objectives
Pursuing organization’s mission
CRAFTING A STRATEGY
Strategy – Making is all about HOW to
Reach performance targets
Out-compete rivals
Achieve sustainable competitive
advantage
Maneuver through threatening
environments
Capture market opportunities
Strengthen firm’s long-term
competitive position
Make the strategic vision a reality
CHARACTERSTICS OF
STRATEGY-MAKING
AXTION-ORIENTED, concerning
WHAT to do
WHEN to do
WHO should be involved
CHARACTERSTICS OF
STRATEGY-MAKING
EVOLVES over time, responding to
Dynamics of competition
Changing customer needs & expectations
Changes in costs
New regulations & changes in trade barriers
Other opportunities & threats
CHARACTERSTICS OF
STRATEGY-MAKING
NEVERENING, resulting in firm’s actual
strategy being a blend of its
INTENDED or PLANNED strategy
AS-NEEDED REACTIONS to new
developments and unforeseen conditions
A Diversified Company
Corporate- Level
Managers
Business-Level
General Managers
Corporate
Strategy
Two way influence
Business
Strategy
Two way influence
Head of Major
Functional Areas
Functional
Strategic
Two way influence
Plant Managers,
Lower-Level
Supervisors
Operating Strategies
A Single-Business Company
Senior Managers
Business
Strategy
Two way influence
Head of Major
Functional Areas
Functional
Strategies
Two way influence
Plant Managers,
Lower-Level
Supervisors
Functional
Strategic
STRATEGY – MAKING PYRAMID:
DIVERSIFIED FIRMS
Formulated for company as a whole
Formulated for each separate unit
Formulated by functional-area managers within each
Business unit
Formulated by plant managers, geographic unit
managers, & lower –level managers
STRATEGY-MAKING PYRAMID:
SINGLE- BUSINESS FIRMS
Formulated for each separate business unit by
Business-level managers
Formulated by functional –area managers within each
Business unit
Formulated by plant managers, geographic unit
Managers & lower-level managers
Identifying Corporate Strategy of a
Diversified Company
Kind of Diversification
Responses to
Changing Conditions
How Much
Diversification
Approach to
Capital Allocation
Corporate
Strategy
Moves to Divest
Weak Units
Moves to
Add New Businesses
And Build New positions
Moves to Build
Competitive
Advantage Via Diversificatio
Moves to Strengthen
Positions and Profits
In Existing Business
WHAT IS CORPORATE STRATEGY?
Overall GAME PLAN for DIVERSIFIED company
Consists of
MOVES to establish business positions
In different industries
APPROACHES to managing group of business
company has diversified into
TASKS OF CORPORATE STRATEGY
Making moves to achieve DIVERSIFICATION initiating
Actions to BOOST PERFORMANCE of businesses
Company has diversified into finding ways to
capture SYNERGY among related business units
2+2=5 effects!
Establishing INVESTMENT PRIORITIES & steering
corporate resources into most attractive business units
Identifying Strategy for a
Single Business Company
Responses to changing conditions
Approach to Vertical
integration
Basic Competitive
Approach
Manufacturing
Strategy
Business
Strategy
Marketing
Strategy
R&D
strategy
Finance Strategy
Moves to Secure
Competitive
Advantage
Moves to Strengthen
Competitive Position
And improve
Performance
WHAT IS BUSINESS STRATEGY?
GAME PLAN for ONE OF BUSINESS
Central thrust is HOW to build & strengthen
Firm’s long-term competitive position
Task separating POWERFUL from WEAK
Business strategies is forging a series of moves
capable of producing
SUSTAINABLE COMPETITIVE ADVANTAGE
WHAT IS BUSINESS STRATEGY
INVOLVES
Forming responses to changes in
Industry
Economy
Regulatory & Political arena
Crafting competitive moves that lead to
sustainable competitive advantage
Uniting strategic initiatives of functional areas
Addressing strategic issues related to firm’s
competitive position & internal situation
FUNCTIONAL STRATEGIES
GAME PLAN for running a particular function
Within a business
Adds DELTAIL to business strategy & govern
HOW key activities will be managed
A business needs as many functional strategies as it
has major functional activities
Role of functional strategies
Provide SUPPORT for overall business strategy
Specify HOW functional managers plan to achieve
functional area performance objectives
OPERATING STRATEGIES
Concerns even narrower strategic approaches
for managing KEY OPERATING UNITS
Designed to achieve strategy-critical
performance targets of operating-level units
Add detail to overall business plan & functional
Strategies but are of lesser scope
EXAMPLE: OPERATING STRATEGY
Boosting Worker Productivity
To boost productivity by 10% managers of firm with
low-price, high-volume strategy took following actions:
Recruitment manager developed selection process
Designed weed out all but best –qualified candidates
Information systems manager devised way to increase
office productivity by installing computerized
work stations for clerical workers
Benefit manager devised improved incentive compensation p
Purchasing manager obtained new efficiency- increasing tool
equipment
EXAMPLE: OPERATING STRATEGY
Improving Delivery & Order-Filling
Manufacturer of plumbing equipment emphasizes
Quick delivery & accurate order-filling as keystones of
Its customer service approach. Warehouse manager took
Following approaches:
Inventory stocking strategy allowing 99% of all
orders to be completely filled without backordering any
item
Staffing strategy of maintaining workforce capabillity
to ship any order within 24 hours.
The Networking of Missions,
Objectives, and Strategies
Level 1
Corporate-Level
Managers
Overall Scope
And Strategic
Mission
Two-Way influence
Level 2
Business-Level
General Managers
Level 3
Heads of Major
Functional Areas
Level 4
Plant Managers,
Lower-Level Supervisors
Corporate
Level
Objectives
Two-Way influence
Corporate
Level
Strategy
Two-Way influence
Business
Level
Mission
Business
Level
Objectives
Two-Way influence
Two-Way influence
Functional
Area
Missions
Functional
Area
Objectives
Functional
Area
Strategies
Two-Way influence
Two-Way influence
Two-Way influence
Operating
Mission
Field Unit
Objectives
Business
Level
Strategies
Two-Way influence
Operating
Strategies
UNITING STRATEGY –MAKING
EFFORT
A firm’s strategic plan is COLLECTION of
Strategies.
Separate strategies must be unified into a
COHESIVE, company-wide action plan
Pieces & layers of strategy should FIT together
like pieces of a PUZZLE
Consistency among business, functional, &
operating strategies comes from strategy-makers’
allegiance to BUSINESS objectives.
STRATEGIC MANAGEMENT
PRINCIPLE
Objectives and strategies that are unified
from top to bottom do not come from an
undirected process where managers at
each level have the freedom to set their
own objectives and strategies
INDEPENDENTLY!
Factors Shaping the Choice of
Company Strategy
Social,
Political,
Regulatory
Factors
Industry
Attractiveness
Opportunities
And
Threats
Conclusions
About
How
Internal
External
Factors
Company Strategic Situation
Internal
Strengths
And
Weaknesses
Key
Executives
influences
Shared Values
And
Culture
Conclusions
About
How
Internal
External
Factors
Crafting
Strategy
For
Overall
Situation
Internal Factors
FACTORS SHAPING STRATEGY
External
Societal, political, regulatory, citizenship considerations
Industry attractiveness & competitive conditions specific
Company opportunities & threats
Internal
Company strengths & weaknesses
Personal ambitions,business philosophies, &
ethical principles of key executives
Influence of shared values & company culture
SOCIAL, POLITICAL,
REGULATORY, & CITIZENSHIP
FACTORS
External factors impacting strategic choices
Health and nutrition concerns
Concerns about alcohol & drug abuse
Sexual harassment
Impact of plant closings on communities
New tax laws
Rising/falling interest rates
Recession economic rates
Trade restrictions, tariffs,& import quotas
CORPORATE SOCIAL
RESPONSIBILITY
SOCIAL RESPONSIBILITY with respect to
strategy entails
Conducting company activities within bounds of what is
considered ethical & in public interest
Responding positively to emerging societal
priorities & expectations
Demonstrating a willingness to take needed
action ahead of regulatory confrontation
Balancing stockholder interests against larger
interest of society as a whole
Being “ good citizen” in community
INDUSTRY ATTRACTIVESNESS
& COMPETITIVE CONDITIONS
Assessing industry & competitive environment
affects how a firm should
Try to position itself its industry
Determines its basic competitive approach
Factors affecting selection of strategy
Pace of market growth
Kinds of change occurring in industry
Competitive forces
Moves of rival competitors
STRATEGIC MANAGEMENT
PRINCIPLE
A Company’s strategy ought to
Be closely matched to industry
And competitive conditions!
COMPANY OPPORTUNITIES &
THREATS
For strategy to be successful, it has to be
well matched to
Company opportunities
Threats to company
STRATEGIC MANAGEMENT
PRINCIPLE
A well – conceived strategy aims at capturing
a company’s best growth opportunities and
defending against
external threats to its well-being and future
performance!
COMPANY STRENGTHS
& WEAKNESSE
A firm’s strategy must be well-matched to its
internal strengths & weaknesses
competitive capabilities
Does firm have CORE COMPETENCIES?
CORE COMPETENCES are critical to strategy –
making because of
Capabilities provided in capitalizing on
a particular opportunity
Competitive edge yielded in marketplace
Potential for being a cornerstone of strategy.
STRATEGIC MANAGEMENT
PRINCIPLE
A well-conceived strategy
Attempts to build upon company
Strengths and correct important
Weaknesses!
AMBITIONS,PHILOSOPHICS,&
ETHICS OF KEY EXECUTIVES
Managers generally stamp strategies
they craft with their own PERSONAL
Ambitions
Values
Business philosophies
Attitudes toward risk
Ethical beliefs
SHARED VALUES &
COMPANY CULTURE
Values & culture can dominate kinds of
strategic moves a company will automatically
Consider OR
Reject
An organization should not undertake
strategic moves which are in conflict with
its culture OR
Values widely shared by managers & employees
EXAMPLE: HEWLETT-PACKARD
HP’s basic values – “ the HP way”
Sharing firm’s success with employees
Showing trust in respect for employees
Providing customers with products/services of
the greatest value
Being genuinely interested in providing
customers
Making profit a high stockholder priority
Avoiding use of long-term debt to finance growth
Individual initiative, creativity, & teamwork
Being a good corporate citizen
LINKING STRATEGY WITH
ETHICS
Ethical and moral standards go beyond
Prohibitions of law
Language of “ thou shall not “ to issues of
DUTY and language of “ should and should not do “
Every action a company takes should pass test of
Being ethically acceptable !
LINKING STRATEGY WITH ETHICS
Ethical responsibilities of firm to STAKHOLDERS
form of return on their investment
EMPLOYEES- Expect respect for their worth &
devoting their energies to firm
CUSTOMERS- Expect equitable relationship
with firm.
COMMUNITY-Expect businesses to be good
citizens in their community.
TESTS OF A WINNING STRATEGY
GOODNESS OF FIT TEST
How well is strategy matched to firm’s
situation?
COMPETITIVE ADVANTAGE TEST
Does strategy lead to sustain able
competitive advantage?
PERFORMANCE TEST
Dose strategy boost firm performance?
STRATEGIC MANAGEMENT
PRINCIPLE
A strategy is not a true winner
unless
It passes ALL THREE of tests!
APPROACHES TO PERFORMING
STRATEGY-MAKING TASK
Manager personally function as chief strategist
Manager delegates strategy-making to others
Manager enlists help of key subordinates in hammering
out consensus strategy
Manager encourages subordinates to develop &
implement strong strategies.