Strategic management

Strategic analysis
Goals and objectives

Internal environment

External environment

Strategy formulation
Business level

Strategy implementation
Structure & control Entrepreneurship

Corporate level

International strategy

Leadership

Chapter 1
Strategic Management and Strategic Competitiveness

Overview

Key concepts of strategic management The contemporary hypercompetition

Stakeholders

What is STRATEGY?

Key Concepts of Strategic Management

Strategy is an integrated and coordinated set of commitments and actions designed to exploit core competences and gain a competitive advantage

Key Concepts of Strategic Management (continued)

Strategic competitiveness achieved when a firm successfully formulates and implements a value-creating strategy Sustainable competitive advantage occurs when a firm implements a value-creating strategy and other companies are unable to duplicate it or find it too costly to imitate Above-average returns returns in excess of what an investor expects to earn from other investments with a similar amount of risk

Strategic Intent

Commitment to significant long-term goals Internally focused Seek to ensure that all of the organizations employees are focused on achieving the firms goals Example Xerox: To be the leader in the global document market

Strategic Mission

An application of strategic intent A statement of a firms unique purpose and the scope of its operations in product and market terms Externally focused Establish a firm individuality, inspiring and relevant to all stakeholders
Example

AOL Time Warner: Connecting, informing and entertaining people in innovative ways that will enrich their lives

Contemporary Hypercompetition

The changing competitive landscape

Global economy Technological changes Information technologies Knowledge intensity

Managerial mindset needs changing too

Think global Be innovative Achieve strategic flexibility

Stakeholders

Who are they? Individuals and groups who

can affect, and are affected by, the strategic outcomes of the firm have legitimate claims on the firm and its performance

Stakeholders

Types of stakeholders
Capital market stakeholders shareholders, banks, other sources of capital Product market stakeholders customers, suppliers, host communities, unions Organizational stakeholders employees, managers

Stakeholder Involvement

Stakeholders interests may conflict When are all stakeholders satisfied? How to divide returns to keep stakeholders involved? How to increase returns so everyone has more to share? Verstehen