Overview of strategy formulation
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Stages of Strategic Management
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The strategic-management process consists of three stages:
• Strategy formulation
• Strategy implementation
• Strategy evaluation
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Strategy Formulation
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Vision defines where we are going.
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Mission defines who we are and what we are doing.
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Vision will be just a dream without mission.
And mission will be just a waste without a vision.
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External Opportunities and Threats
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Economy
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Social
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Cultural Factors
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Demographic
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Environmental
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Political
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Legal
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Governmental
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Technological Trends
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Competitive Trends
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Strategic management is all about gaining and maintaining competitive advantage.
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Your organization has something that anyone does not have
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Competitive Advantage
• Windows bought Nokia
• Smart bought Sun Cellular
• Smart bought Araneta Coliseum
• MOA Stadium
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Internal Strengths and Weaknesses
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• Management
• Marketing
• Finance/Accounting
• Production/Operations
• Research and Development
• Management Information Systems
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People
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Machines/ Equipment
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Land and Buildings
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Consumption of Energy
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MATERIALS
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Money
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What will happen to our organization
if we cannot adapt?
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Long – Term Objectives
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It should be SMART
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Difference between Objectives and Mission/Vision
• Objectives are different per department.
• Objectives are different per day and per year.
• Objectives are guided by the mission and vision.
• Objectives are usually from two to five years.
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Alternative Strategies
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Strategy Formulation includes:
• Developing a vision and mission
• Identifying an organization’s external opportunities
and threats
• Determining internal strengths and weaknesses
• Establishing long-term objectives
• Generating alternative strategies
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Case Study
The six broadcast networks—ABC, CBS, Fox, NBC, UPN,
and WB—are being assaulted by cable channels, video
games, broadband, wireless technologies, satellite radio,
high-definition TV, and digital video recorders.
The three original broadcast networks captured about 90
percent of the prime-time audience in 1978, but today
their combined market share is less than 50 percent.
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The strategic-management process consists of three stages:
• Strategy formulation
• Strategy implementation
• Strategy evaluation
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The ACTION STAGE of Strategic Management
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Implementing strategy
means mobilizing your
MACHINES,
EQUIPMENT,
MATERIALS, FACILITIES,
MONEY, and PEOPLE.
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Often considered to be the MOST DIFFICULT STAGE in strategic management.
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Strategy Implementation needs ABILITY and ATTITUDE.
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The strategic-management process consists of three stages:
• Strategy formulation
• Strategy implementation
• Strategy evaluation
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Strategy Evaluation
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Because SUCCESS today is no guarantee of SUCCESS tomorrow!
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Knowing
WHAT,
WHEN,
WHERE, and
WHY particular
strategies are
not working
well.
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All strategies are subject to future modification
because EXTERNAL AND INTERNAL FACTORS
are CONSTANTLY CHANGING.
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Stages in Strategic Management
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Stages in Strategic Management
• Where are we now?
• Where do we want to go?
• How are we going to get there?
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Benefits of Strategic Management
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Strategic management allows an
organization to be more proactive
than reactive in shaping
its own future.
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To help organizations formulate
better strategies through the use of a
more systematic, logical, and rational
approach to strategic choice.
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Seventeen Guidelines for
the Strategic-Planning
Process to Be Effective
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It should be a people process more than a paper process.
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It should be a learning process for all managers and employees.
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It should be words supported by numbers rather than numbers supported by words.
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It should be simple and non-routine.
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It should vary assignments, team memberships, meeting formats, and even the planning calendar.
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It should
challenge the
assumptions
underlying the
current
corporate
strategy.
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It should welcome bad news.
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It should welcome
open-mindedness
and a spirit of
inquiry and
learning.
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It should not be a bureaucratic mechanism.
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It should not
become
ritualistic,
stilted, or
orchestrated.
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It should not be too formal, predictable, or rigid.
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It should not contain jargon or
arcane planning language.
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It should
not be a
formal
system for
control.
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It should not disregard qualitative
information.
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It should not be
controlled by
“technicians.”
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Do not pursue too many strategies at once.
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Continually
strengthen
the “good
ethics is good
business”
policy.