Introduction to Strategic Management
Successfully formulate and implement value-creating
strategy
Based on (sustainable) competitive advantage
To earn above-average returns
To create value for stakeholders
Introduction to Strategic Management
Strategic Management Process
Strategic Inputs: Internal and External Scanning
Strategic Actions: Formulation and implementation
of strategy
Strategic Outcomes: Above, at or below average
returns
Introduction to Strategic Management
From Organizational Vision to Tactical Steps
Define the Organization:
Vision
Mission Statement
Understand the Operating Environment
External Environment (Threats and Opportunities)
Internal Conditions (Strengths and Weaknesses)
Determine Strategic Alternatives
Formulate Strategy (long term)
Implement Strategy through Tactics (short term)
Introduction to Strategic Management
SWOT Analysis
External Analysis –
EFAS Matrix
(Chapter 3)
Internal Analysis IFAS Matrix
(Chapter 4)
Strategy
Formulation
Alternative
Strategies –
TOWS Matrix
(Chapter 5)
Corporate
Strategy
(Chapter 6)
Functional
Strategy
(Chapter 7)
Strategy
Implementation
Organizing
(Chapter 8)
Staffing
(Chapter 9)
Evaluating
(Chapter 10)
Introduction to Strategic Management
The New Competitive Landscape
The Global Economy
Movement of goods, services, capital/financing,
technology and innovation, information, and
people across borders
Introduction to Strategic Management
The New Competitive Landscape
The Global Economy
Competitive Implications
Managing supply and logistics (raw materials,
components manufacturing, assembly,
distribution)
Adaptation-standardization decisions in
management practices and marketing programs
Introduction to Strategic Management
The New Competitive Landscape
Technology and Technological Change
Increasing Rate of Change
Increasing Rate of Diffusion
Competitive Implications
Impact of Technology Convergence.
Application of Nanotechnology.
Introduction to Strategic Management
The New Competitive Landscape
Information Intensity
Declining costs
Increasing accessibility
Knowledge Intensity (Information, Intelligence,
Expertise)
Increasing proportion of shareholder value
Strategic Flexibility, Capacity to Learn & Reorient
Introduction to Strategic Management
The New Competitive Landscape
Information and Knowledge Intensity
Competitive Implications
Knowledge management systems (SAP)
Control versus flexibility (strategic alliances)
Introduction to Strategic Management
Mission of Firm
Clearly articulate 3-5 year plan of firm
Identify:
The industry(ies) it wishes to participate in
How it wishes to participate
Marketing mix (product, price, place, promotion
Customer “wants and needs” it will serve
Position it will hold in its chosen markets
Introduction to Strategic Management
Mission is:
 What is the ultimate accomplishment – goal for the
firm?
 Usually stated in the “eyes” of the customers and key
stakeholders
 “How” it is achieved (core competencies of the firm)
Introduction to Strategic Management
Examples of Vision and Mission Statements
Vision: S C Johnson
Mission Statement: Proctor & Gamble
Dilbert’s Mission Statement Generator
Introduction to Strategic Management
What leads to a formulating a new strategy?
•New CEO
•External intervention
Triggering
events
•Threat of change in
ownership
•Performance gap
•Strategic inflection point
Stimulus
for change
in
strategy
Introduction to Strategic Management
Strategy: Levels and Dynamics
Corporate: general perspective towards growth
and management of various business units,
product lines, functional areas
Business: Strategic Business Units (SBUs), focus
on improvement of competitive position of
products and services
Functional: focus on marketing, R & D, etc. to
achieve SBU and overall corporate objectives.
Introduction to Strategic Management
Corporate goals and objectives
include:
–Profitability (net profits)
–Growth (increase in total assets, etc.)
–Utilization of resources (ROE or ROI)
–Market leadership (market share)
Introduction to Strategic Management
Intended
Strategy
Deliberate
Strategy
Realized
Strategy
Unrealized
Strategy
Emergent
Strategy
Introduction to Strategic Management
The Importance of Stakeholders
Capital Market Stakeholders - shareholders and major
suppliers of firm’s capital
Product Market Stakeholders - primary customers,
suppliers, host communities, and unions
Organizational Stakeholders - employees (managerial and
non-managerial)
Societal Stakeholders - environmental and social
responsibility organizations
Governments
Employees
Investors,
Shareholders and
Lenders
Supply Chain
Associates
Private Organizations
THE CORPORATION
Local Communities
and Citizens
Customers and Users
Unions
Joint Venture
partners and
Alliances
Regulatory
Authorities
Governments
Joint Venture
partners
& Alliances
Supply Chain
Associates
Investors: Shareowners & Lenders
Employees
Unions
Local communities
& Citizens
CORPORATION
Customers
& Users
Regulatory
Authorities
RESOURCE BASE
INDUSTRY STRUCTURE
SOCIAL POLITICAL ARENA
Private
Organizations
Community
Relations
“Frankenstein
Foods”
GMOs
Strategic
alliances
EU Approvals;
Import licenses
Suppliers
Investors
Employees:
- US
- Global
EPA
regulations
Greenpeace
MONSANTO
Customers:
- Domestic
- Global
Global
Joint
ventures
RESOURCE BASE
INDUSTRY STRUCTURE
SOCIAL POLITICAL ARENA
Environmental
Issues