01. an overview of strategic management
TRANSCRIPT
![Page 1: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/1.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 1/26
1
An Overview of
Strategic Management
Chapter # 1
![Page 2: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/2.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 2/26
2
Strategy«!
A strategy is an integrated
plan of action designed to
achieve a particular goal.
The word strategy has
military connotations,
because it is der ives from the
Greek word for army ("leader
or commander of an army,
general´).
![Page 3: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/3.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 3/26
3
Strategy is different from tactic. Inmilitary terms, tactic is concerned
with the conduct of an engagementwhile strategy is concerned withhow different engagements arelinked.
Tactics are the actual means usedto gain an objective, while strategyis the overall campaign plan, which may involve complex
operational patterns, activity, anddecision-mak ing.
a method of employing forces in
combat
![Page 4: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/4.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 4/26
4
Strategic ManagementStrategic Management
Strategic or Institutionalmanagement is comprehensive
and ongoing management
process aimed at the conduct of
drafting, implementing andevaluating crosscross- -functional functional
decisionsdecisions that will enable an
organization to achieve its
objectives
Art and science of formulating, implementing, and
evaluating crosscross--functional decisionsfunctional decisions that enable an
organization to achieve its objectives.
![Page 5: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/5.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 5/26
5
Strategic management is a f ield that
deals with the major intended and
emergent initiatives taken by general
manager s on behalf of owner s,
involving utilization of resources, to
enhance the performance of ¿rms intheir external environments.
It entails s pecifying the organization's mission, vision
and objectives, developing policies and plans, often interms of projects and programs, which are designed to
achieve these objectives, and then allocating resources
to implement the policies and plans, projects and
programs.
![Page 6: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/6.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 6/26
6
Intuition is based on:
Past exper iences
Judgment
Feelings
SM Integrates Intuition & Analysis
Intuition is useful for decision making in conditions of:
Great uncertainty
Little precedent
Highly interrelated var iables
Several plausi ble alternatives
![Page 7: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/7.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 7/26
7
Strategic Management AchievesStrategic Management Achieves
Organizational SuccessOrganizational Success
Process of Integrating:
Marketing
HRM
Finance/Accounting
Production/Operations
R & D
Computer information
systems
![Page 8: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/8.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 8/26
8
General Terminology
General Terminology
³S trategic Management ́
Synonymous with
³S trategic Planning ́
� Strategic management
U
sed more often in academia
� Strategic planning
Used more often in the business world
![Page 9: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/9.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 9/26
9
Specif ically
Specif ically
S trategic management
Refer s to: Strategy formulation Strategy implementation
Strategy evaluation
S trategic planning Refer s to:
Strategy formulation
![Page 10: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/10.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 10/26
10
StrategicStrategic--Management ProcessManagement Process
Strategy Formulation
Strategy Implementation
Strategy Evaluation
![Page 11: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/11.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 11/26
11
Strategy formulation: the set of processes involved
in creating or determining the strategies of the
organization; it focuses on the content of strategies.
Strategy implementation: the methods by which
strategies are operational or executed within the
organization; it focuses on the processes through
which strategies are achieved. Strategy evaluation: Process by which strategies
are evaluated & rectif ied
StrategicStrategic--Management ProcessManagement Process
![Page 12: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/12.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 12/26
12
Strategy Formulation
Vision & Mission
Alternative Strategies
Long-Term Objectives
Strengths & Weaknesses
Opportunities & Threats
Strategy Selection
![Page 13: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/13.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 13/26
13
Strategy Implementation
Motivate Employees
Policies
Annual Objectives
R esource Allocation
![Page 14: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/14.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 14/26
14
Strategy Evaluation
Corrective Action
Measure Performance
R eview
External & Internal
![Page 15: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/15.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 15/26
15
Strategic Planning vs. LongStrategic Planning vs. Long--rangerange
PlanningPlanning
Long-range planning is considered to mean the
development of a plan for accomplishing a goal or setof goals over a per iod of several year s, with theassumption that current
knowledge about futureconditions is suff icientlyreliable to ensure the plan's reliability over the duration
of its implementation.
Strategic planning assumes
that an organization must be res ponsive to a dynamic, changing environment
![Page 16: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/16.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 16/26
16
Adaptation to Change Adaptation to Change
Organizations must monitor events
On-going process
Internal and external events
Timely changes
R ate and magnitude of changes
Increasing dramatically
E-commerceDemographics
Technology
Merger-mania
![Page 17: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/17.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 17/26
17
Importance of Strategic Management
1. Provides a sense of long-term direction for
organisation member s.2. Enhanced awareness of SWOT
3. Under standing of competitor s¶ strategies
4. Increased employee productivity & involvement
5. R educed resistance to change
6. Clear performance-reward relationshi ps
7. Order and disci pline to the f irm
8. View change as opportunity9. Proactive vs. R eactive
10. More prof itable and successful
11. Formulate better strategies (Systematic, logical, and
rational approach)
![Page 18: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/18.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 18/26
18
Importance of Strategic Management
Competitive AdvantageDirection for
the Organisation
Supports InnovationBuilds
Commitment
![Page 19: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/19.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 19/26
19
Poor reward structures- Fire-fighting- Embroiled in cr ises management
Waste of time-
Too expensive-
Laziness- Content with success- We are successful so what's need of SM
Fear of failure-
Overconfidence on experience-
Prior bad experience Self-interest- viewing new plans as threat
Fear of the unknown- uncertainty regarding new plans, system, new role, new sk ills
Suspicion- distrust upon management
Why Some Firms DoWhy Some Firms Do NoNo Strategic PlanningStrategic Planning
![Page 20: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/20.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 20/26
20
Comprehensive Strategic Management ModelComprehensive Strategic Management Model
External
Audit
Internal
Audit
Long-TermObjectives
Generate,
Evaluate,SelectStrategies
Implement
Strategies:Mgmt Issues
ImplementStrategies:Marketing,Fin/Acct,R&D, CIS
Measure &
EvaluatePerformance
Vision
&Mission
![Page 21: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/21.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 21/26
21
Strategic Management TermsStrategic Management Terms
Competitive Advantage
Anything that a firm does specially well as compared to rival firms.
A f irm can sustain CA for only a certain per iod due to r ival f irms
imitating & undermining that advantages. A competitive advantage exists when the f irm is able to deliver
the same benef its as competitor s but at a lower cost (costadvantage), or deliver benef its that exceed those of competingproducts (differentiation advantage). Thus, a competitive
advantage enables the f irm to create super ior value for its customer s and super ior prof its for itself .
Cost and differentiation advantages are known as positional advantages since they descr ibe the f irm's position in theindustr y as a leader in either cost or differentiation.
![Page 22: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/22.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 22/26
22
Long-Term Objectives
� Long-term objectives are results that an
organization seeks over a multiyear period.
Common categories for business long-term
objectives include profitability, employee
development, productivity, technology development,employee relations & competitive position etc.
Challenging
Measurable
Consistent Reasonable
Focus coordination
Provide basis for effective management
![Page 23: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/23.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 23/26
23
Five Years Economic Plans of Pakistan
Fir st Five-Year Plan (1955-60). In practice, this plan was not implemented, however , mainly because political instability led to a neglect of economic
policy
The Second Five-Year Plan (1960-65) surpassed its major goals when allsector s showed substantial growth.
Third Five-Year Plan (1965-70), designed along the lines of its immediate predecessor , produced only modest growth.
The Fourth Five-Year Plan (1970-75) was abandoned as East Pak istan became
independent Bangladesh. Under Bhutto, only annual plans were prepared, andthey were largely ignored.
The Fifth Five-Year Plan (1978-83) was an attempt to stabilize the economyand improve the standard of living of the poorest segment of the population.
The Sixth Five-Year Plan (1983-88) represented a signif icant shift toward the pr ivate sector.
The Seventh Five-Year Plan (1988-93) provided for total public-sector s pending of Rs350 billion
Eighth Five-Year Plan (1993-98)- Had not yet been announced, mainly because the successive changes of government in 1993 forced minister s tofocus on short-term issues. Instead, economic policy for FY 1994 was being
guided by an annual plan.
![Page 24: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/24.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 24/26
24
Strategies
� Strategies are mean by which long-term objectives arerealized
Geographic Expansion-
Diversification- A technique that mixes a wide var iety of investments in different f ields to on average, yield higher returns and
pose a lower r isk than any individual investment found within thef ield.
New Product Development-
Market Penetration- Increasing market share of an
existing product as compare to competitor s. R etrenchment- Cutting back and downsizing to reduce
expenses.
Mergers & joint Ventures
![Page 25: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/25.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 25/26
25
Annual Objectives
� S hort-term milestones necessary to achieve long-term
objectives. Represent the basis for allocating resources
Established at corporate, divisional, and functionallevels
Stated in terms of accomplishments for:
management
marketing
f inance/accounting production/operations
research and development
information systems accomplishments
![Page 26: 01. an Overview of Strategic Management](https://reader030.vdocuments.mx/reader030/viewer/2022021117/577d29fa1a28ab4e1ea85fad/html5/thumbnails/26.jpg)
8/6/2019 01. an Overview of Strategic Management
http://slidepdf.com/reader/full/01-an-overview-of-strategic-management 26/26
26
Policies
� I mportant in strategy implementation as the meansby which annual objectives will be achieved
Guide to decision making and address repetitive
situations Established at corporate, divisional, or functional levels
Allow consistency & coordination within and between
organizational departments