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
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)
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

Dilberts Mission Statement Generator
Introduction to Strategic Management
Triggering
events
New CEO

External intervention

Threat of change in
ownership

Performance gap

Strategic inflection point
Stimulus
for change
in
strategy
What leads to a formulating a new 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
Unrealized
Strategy
Emergent
Strategy
Realized
Strategy
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
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
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
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