Overview of
Strategic Management
Concepts
Three Themes
• Global Considerations Impact Virtually
All Strategic Decisions
• Information Technology Has Become a
Vital Strategic Management Tool
• Preserving the Natural Environment is
an Important Strategic Issue
Global Considerations
Impact Virtually All
Strategic Decisions
Should we
import?
Which
foreign languages
should I learn?
Will NAFTA
affect our firm?
Should we
export?
Information Technology Has Become
A Vital Strategic Management Tool
What functions
shall we include
on our Web site?
Should we
upgrade our
PCs?
Should we
outsource MIS?
Should we buy
our sales staff
laptops?
Preserving the Natural
Environment is an Important
Strategic Issue
Is our firm
environmentally
friendly?
How can we
recycle?
How can our
waste be
reduced?
Will Congress
pass tougher
laws?
The Definition of
Strategic Management
The Art and Science of
Formulating, Implementing, and
Evaluating Cross-Functional
Decisions That Enable an
Organization to Achieve Its
Objectives
The Basis for Good
Strategic Decisions
Intuition + Analysis
Effective Strategic Decisions
Ten Key External Forces
Competitive
Economic
Technological
Social
Governmental
Cultural
Political
Demographic
Environmental
Legal
Economic Forces: Examples of Variables
To Be Monitored
Level of Disposable Income
Interest Rates
Inflation Rates
Unemployment Trends
Value of the Dollar Abroad
Tax Rates
Budget Deficits
Stock Market Trends
Economic Conditions Abroad
Economic Forces: Examples of Variables
To Be Monitored
Level of Disposable Income
Interest Rates
Inflation Rates
Unemployment Trends
Value of the Dollar Abroad
Tax Rates
Budget Deficits
Stock Market Trends
Economic Conditions Abroad
Social, Cultural, Demographic, and
Environmental Forces: Examples of Variables
to be Monitored
Per Capita Income
Levels of Disposable Income
Population Changes By Race, Age, & Area
Attitudes Towards Leisure Time
Average Level of Education
Attitudes Towards Customer Service
Regional Changes in Tastes and Preferences
Rising Consciousness for the Natural Environment
Political, Governmental, & Legal Forces:
Examples of Variables to be Monitored
Government Regulations and Deregulation
Special Tariffs
Environmental Protection Laws
U.S. - Foreign Country Relationships
Import-Export Regulations
World Oil, Currency, and Labor Markets
The Rise of Democracies Worldwide
Local, State, National, and Foreign Elections
Key Questions About Competitors
Who are our
competitors?
What are
Competitors’
Objectives?
Where are our
competitors
located?
What are
Competitors’
Strengths?
What are
Competitors’
Weaknesses?
How Vulnerable
are we to our
Competitors’
Strategies?
Fourteen Key Internal Forces
Management
Marketing
Research &
Development
Purchasing
Manufacturing
Production/
Operations
Distribution
Key Internal Forces (cont.)
Finance/Accounting
Packaging
Promotion
Human
Resource
Management
Employee/
Manager
Relations
Vendor
Relations
Computer
Information
Systems
Keys to Formulating Strategies
Business Mission
Internal
Strengths and
Weaknesses
External
Opportunities
and Threats
Strategy Formulation
A Comprehensive Strategic Management Model
Feedback
Perform
External
Audit
Establish
Longterm
Objectives
Develop
Mission
Statement
Generate,
Evaluate,
and
Select
Strategies
Establish
Policies and
Annual
Objectives
Allocate
Resources
Measure
and
Evaluate
Performance
Perform
Internal
Audit
Strategy Formulation
Strategy Implementation
Strategy Evaluation
Benefits of Strategic Management
- Improved Communication - Greater Productivity
- Increased Understanding
- More Effective Strategies
- Enhanced Commitment
- Less Waste
- Allow Firm to Influence, Initiate, and Anticipate
- Be Proactive Rather Than Reactive