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AGENDA

09/09 & 09/10


Nature

of Strategic Challenge &


Strategic Management
The Strategy Concept and Process
Strategic Plan - Team Meetings

Strategic Challenge
To survive
To grow

To die

In order to survive and to prosper


(meet the strategic challenge)
every
organization
must:
Define and
grow

Internal Competencies

Develop and maintain an alignment with the environment


Create the future

Meeting the Strategic Challenge

1950s

Finding a profit-producing match between


products/services of the organization and
the needs of the market.

1960s

Transforming the internal structure and


competencies of the organization.

1970s & 1980s


Planning interfaces with suppliers because
of limited resources.
Acknowledging power of
society/environment to impact an
organization.
Recognizing the global nature of
competition.

1990s

Realizing that the speed of change is often


greater than the speed of strategic response.

Focusing competitive advantage on


information.

2000s

Arenas that need to be addressed


if the organization is to meet
the strategic challenge
Products/Services
Competencies
Inputs
Society
Globalization
Change
Information
Future

What
is
Strategic Management?

Early Definition
Determination of basic long-term goals and
objectives
Adoption of courses of action
Allocation of resources necessary for carrying out
these goals

Chandler, A. 1962. Strategy & Structure: Chapters in


the History of the Industrial Enterprise, Cambridge:
M.I.T. Press, p.13

Another way of saying it


Art and Science
Formulating, Implementing, and Evaluating
Cross-Functional Decisions
Enabling an Organization
Environmental
To set and achieve its
Scanning
Mission
Mission and Objectives

Objectives
Decisions
Actions
Evaluation

Art and Science

Intuition (art)
past experiences, judgment, feelings
particularly useful for making decisions in
situations of great uncertainty or little precedent.

Analysis (science)
logical, systematic approach
organization of quantitative information/data to
be used for decision making.

Emphasis of Strategic
Management

VALUE CREATION
What is Value?

CONFIGURATION
Multimarket scope

product, geographic, and vertical boundaries

COORDINATION
Management of activities and businesses within
company

Strategic Management
is a Process

Process: flow through interrelated stages


toward the achievement of an aim

The flow of information involves historical,


current, and forecasted data on the environment
and operations of an organization.
Never finished.

Implications of viewing Strategic


Management as a Process

Inter-relatedness
A change in one part affects several others

Formulation and Implementation are often


interwoven
Allowance for continuous feedback and
updates
Communication & Commitment

Strategic Management
involves long-term, future-oriented,
complex decision making
requires considerable resources
participation at all levels of an organization

Top management is essential

Specifics

I. Strategy Formulation

1. Developing a business vision/mission


Mission = enduring statements of purpose that
distinguish one business from other firms.

2. Establishing long-term objectives


Specific results - more than one year.
Challenging, measurable, reasonable, clear.
Established for overall corporation and each
division

3. Identifying external opportunities and threats...could


benefit or harm an organization in the future.
Macro Environment
economic, social, cultural, demographic, environmental,
political, legal, governmental, and technological
largely beyond the control of the organization

Micro Environment
Industry
Competitive trends & events

4. Determining internal strengths and


weaknesses
Controllable activities within an organization
that are performed especially well or poorly.
Competencies (skills)
Functional activities are areas where strengths
or weaknesses arise.

Strategy Formulation Cont

5. Generate and choose corporate strategies


Means by which long-term objectives will be
achieved.

II. Strategy Implementation

Establish annual objectives


Short-term milestones that organizations must achieve to reach
long-term objectives.
Measurable and established at corporate, business, and
functional levels.

Devise policies
Guidelines, rules, procedures

Structure alignment
Mobilizing all functions to put formulated strategies into
action.

III. Strategy Evaluation


Assess the outcomes of formulation and
implementation.
Three fundamental activities

reviewing external and internal factors


measuring performance
taking corrective actions

Who uses
Strategic Management

Profit
Big Corporations
Medium Size Corporations
Small Businesses

Government
Nonprofit
Individual Career Management
Levels of FORMALITY will vary

When
is
Corporate Strategy Practiced?
Real Time
Always

Where
in Larger Organizations is
Strategic Management Practiced?

Corporate Level
Board of Directors; CEO; Administrative Officers
Determine mission; set objectives and strategies

Business Level
How Firm will compete in selected
product/market arenas

Functional Level
Execute the plans