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Introduction to Strategic Management
Successfully formulate and implement value-creating strategy
Based on (sustainable) competitive advantageTo earn above-average returnsTo create value for stakeholders -
Introduction to Strategic Management
Strategic Management Process
Strategic Inputs: Internal and External ScanningStrategic Actions: Formulation and implementation of strategyStrategic 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 EnvironmentExternal 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 Implementation
Organizing (Chapter 8)
Staffing (Chapter 9)
Evaluating (Chapter 10)
Strategy Formulation
Alternative Strategies TOWS Matrix (Chapter 5)
Corporate Strategy (Chapter 6)
Functional Strategy (Chapter 7)
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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 ChangeIncreasing Rate of DiffusionCompetitive Implications
Impact of Technology Convergence.Application of Nanotechnology. -
Introduction to Strategic Management
The New Competitive Landscape
Information Intensity
Declining costsIncreasing accessibilityKnowledge Intensity (Information, Intelligence, Expertise)
Increasing proportion of shareholder valueStrategic 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 inHow it wishes to participateMarketing mix (product, price, place, promotion
Customer wants and needs it will serve
Position it will hold in its chosen markets
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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)
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Introduction to Strategic Management
Examples of Vision and Mission Statements
Vision: S C JohnsonMission Statement: Proctor & GambleDilberts Mission Statement Generator -
Introduction to Strategic Management
Triggering
events
New CEOExternal interventionThreat of change inownership
Performance gapStrategic inflection pointStimulus
for change
in
strategy
What leads to a formulating a new strategy?
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Introduction to Strategic Management
Strategy: Levels and Dynamics
Corporate: general perspective towards growth and management of various business units, product lines, functional areasBusiness: Strategic Business Units (SBUs), focus on improvement of competitive position of products and servicesFunctional: 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
Unrealized Strategy
Emergent Strategy
Realized Strategy
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Introduction to Strategic Management
The Importance of Stakeholders
Capital Market Stakeholders - shareholders and major suppliers of firms 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
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Private Organizations
Joint Venture partners and Alliances
Governments
Supply Chain Associates
Local Communities and Citizens
Regulatory Authorities
Unions
Investors, Shareholders and Lenders
Customers and Users
Employees
THE CORPORATION
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CORPORATION
RESOURCE BASE
Investors: Shareowners & Lenders
Customers & Users
Employees
INDUSTRY STRUCTURE
SOCIAL POLITICAL ARENA
Unions
Regulatory Authorities
Supply ChainAssociates
Joint Venture partners& Alliances
PrivateOrganizations
Local communities & Citizens
Governments
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MONSANTO
RESOURCE BASE
Investors
Customers:- Domestic- Global
Employees:- US- Global
INDUSTRY STRUCTURE
SOCIAL POLITICAL ARENA
EPA regulations
GlobalJointventures
Strategic alliances
EU Approvals; Import licenses
EnvironmentalIssues
Greenpeace
Community Relations
GMOs
FrankensteinFoods
Suppliers
CORPORATION
RESOURCE BASE
Investors: Shareowners & Lenders
Customers
& Users
Employees
INDUSTRY STRUCTURE
SOCIAL POLITICAL ARENA
Unions
Regulatory
Authorities
Supply Chain
Associates
Joint Venture
partners
& Alliances
Private
Organizations
Local communities
& Citizens
Governments
Private Organizations
Joint Venture
partners and
Alliances
Governments
Supply Chain
Associates
Local Communities
and Citizens
Regulatory
Authorities
Unions
Investors,
Shareholders and
Lenders
Customers and Users
Employees
THE CORPORATION
MONSANTO
RESOURCE BASE
Investors
Customers:
- Domestic
- Global
Employees:
- US
- Global
INDUSTRY STRUCTURE
SOCIAL POLITICAL ARENA
EPA
regulations
Global
Joint
ventures
Strategic
alliances
EU Approvals;
Import licenses
Environmental
Issues
Greenpeace
Community
Relations
GMOs
Frankenstein
Foods
Suppliers