Chapter # 1 Outline

Five Tasks of Strategic Management

Developing a Strategic Vision and Mission
Setting Objectives
Crafting a Strategy
Implementing and Executing the Strategy
Evaluating Performance and Initiating
Corrective Adjustments
Why Strategic Management Is a Process
Who Performs the Tasks of Strategy?
Benefits of Thinking and Managing
Strategically

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Stragetic Management
A capstone subject
It enhance your understanding of business as a
whole
Develops strategic thinking
Prerequisite for becoming a (business) leader

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Thinking Strategically:
The Three Big Strategic Questions
1. Where are we now?
2. Where do we want to go?
Business(es) to be in and market

positions to stake out?

Buyer needs and groups to

serve?
Outcomes to achieve?

3. How do we get there?

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What Is Strategy?
A companys strategy consists of the set of
competitive moves and business approaches that
management is employing to run the company
Strategy is managements game plan to
Attract and please customers
Stake out a market position
Conduct operations
Compete successfully
Achieve organizational objectives
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Why Are Strategies Needed?

To proactively
shape how a
companys
business will
be conducted

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To mold the
independent actions
and decisions of
managers and
employees into a
coordinated,
company-wide
game plan

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Figure 1-1: The Five Tasks

of Strategic Management
Task 1
Develop a
Strategic
Vision
and
Mission

Revise as
Needed

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Task 2

Task 3

Task 4

Task 5

Set
Objectives

Craft a
Strategy
to Achieve
Objectives

Implement
and
Execute
Strategy

Monitor,
Evaluate,
and Take
Corrective
Action

Revise as
Needed

Improve/
Change

Improve/
Change

Recycle
as Needed

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Characteristics of a Strategic Vision

A roadmap of a companys
future

Future technology-productcustomer focus

Geographic and product

markets to pursue

Capabilities to be developed

Kind of company that

management is trying to
create

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Missions vs. Strategic Visions

A mission statement
focuses on current
business activities -who we are and
what we do
Current

product and
service offerings
Customer needs
being served
Technological and
business capabilities
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A strategic vision
concerns a firms future
business path -where we are going
Markets

to be pursued
Future technologyproduct-customer
focus
Kind of company that
management is
trying to create

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Types of Objectives Required

Financial Objectives

Strategic Objectives

Outcomes focused on
improving financial
performance

Outcomes focused on
improving long-term,
competitive business
position

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Crafting a Strategy

Involves deciding how to

Respond to changing
buyer preferences
Our strategy
will be . . .
Respond to new
market conditions
Grow the business over
the long-term
Achieve performance
targets
Outcompete rivals

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Figure 1-2: A Companys Strategy is

Partly Planned and Partly Reactive

Company
Experiences,
Know-how,
Resource
Strengths and
Weaknesses,
and
Competitive
Capabilities

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gy
e
t
a
r
t
s
d
e
n
o
Aband atures
fe

Planned Stra
t

gy
New initiativ
es plus ong
oing
strategy fea
tures contin
u ed
from prior p
eriods
to
s
n
o
i
t
reac
e
v
i
t
p
ces
n
a
Ada
t
s
m
ircu
c
g
n
i
g
chan
trategy

Actual
Company
Strategy

eS
v
i
t
c
a
e
R

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Figure 1-3: Understanding a Companys

Strategy -- What to Look For
Actions to diversify
Actions to strengthen
resources &
capabilities

Actions to outcompete rivals

Responses to
changing external
circumstances

Pattern
of Actions
That Define
Strategy

How functional
activities are
managed
Efforts to pursue
new opportunities or
defend against threats

Actions to alter
geographic
coverage
Actions to merge or
acquire rival companies

Actions to form strategic

alliances and collaborative
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partnerships

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Figure 1-4: Strategic Approaches to

Preparing for Future Market Conditions
Future Market Conditions

Company Approaches
Reactive/Follower

Proactive/Leader

Rapid
Revolutionary
Change

Keep from being

swamped by the
waves of change

Aggressively
altering strategy to
make waves and
drive change

Gradual
Evolutionary
Change

Revising strategy
(hopefully in time)
to catch the waves
of change

Anticipating
change and
initiating strategic
actions to ride the
crest of change

Source: Adapted from Derek F. Abell, Competing Today While Preparing for Tomorrow, Sloan Management Review 40, No. 3 (Spring 1999), p. 75.

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What is a Strategic Plan?

Where firm is headed -Strategic vision and
business mission
Short and long term performance
targets -- Strategic and
financial objectives
Action approaches to achieve
targeted results -- A
comprehensive strategy
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Strategy Implementation and Execution

Strategy implementation and
execution is an action-oriented,
make-it-happen process involving
people management, developing
competencies and capabilities,
budgeting, policy-making, motivating,
culture-building, and leadership
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Characteristics of the
Strategic Management Process
Need to do the five tasks never goes away
Boundaries among the five tasks are blurry
Strategizing is not isolated from other
managerial activities
Time required comes in lumps and spurts
The big challenge: To get the best strategysupportive performance from employees,
perfect current strategy, and improve strategy
execution
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