Unit 1 strategic management 2

Unit 1 strategic management 2

• 1.
  Strategic Management
• 2.
  Strategic Management Defined Theset of managerial decisions and actions that determines the long-run performance of a corporation. It includes: environmental scanning (internal & external) strategy formulation strategy implementation evaluation and control It focuses on integrating management, marketing, finance/accounting, production/operations, research and development, and computer information systems to achieve organizational success.
• 3.
  Benefits of StrategicManagement Clearer sense of strategic vision Sharper focus on what is strategically important Improved understanding of rapidly changing environment
• 4.
  Three Key StrategicQuestions Where is the organization now? If no changes are made, where will the organization be in one, two, five or ten years? Are the answers acceptable? If the answers are not acceptable, what specific actions should management undertake? What are the risks and payoffs involved?
• 5.
  Strategic Management Model Strategy Formulation Strategy Implementation Evaluation andControl Mission Objectives Strategies Policies Feedback/Learning Environmental Scanning Societal Environment General Forces Task Environment Industry Analysis Structure Chain of Command Resources Assets, Skills Competencies, Knowledge Culture Beliefs, Expectations, Values Reason for existence What results to accomplish by when Plan to achieve the mission & objectives Broad guidelines for decision making Programs Activities needed to accomplish a plan Budgets Cost of the programs Procedures Sequence of steps needed to do the job Process to monitor performance and take corrective action Performance External Internal
• 6.
  Environmental Scanning Monitoring, evaluatingand disseminating information from the environment to key people within the corporation. Scan via SWOT analysis: Look for opportunities/threats in the external environment Look for strengths/weaknesses in the internal environment
• 7.
  Strategy Formulation The processof developing long-range plans to deal effectively with environmental opportunities and threats in light of corporate strengths and weaknesses. Composed of:  Mission  Objectives  Strategies  Policies
• 8.
  Mission The purpose orreason for the corporation’s existence. It tells who the company is, what they do as well as what they’d like to become.
• 9.
  Objectives The end resultsof planned activity. They state WHAT is to be accomplished by WHEN. They should be quantified, if possible. Should be specific, measurable and obtainable.
• 10.
  Strategies A strategy isa comprehensive master plan stating HOW the corporation will achieve its mission and objectives. There are three types: Corporate - a corporation’s overall direction and the management of its businesses. Business - emphasizes improving the competitive position of a corporation’s products or services in a specific industry or market segment. Functional - concerned with developing a distinctive competence to provide a company or business unit with a competitive advantage.
• 11.
  Hierarchy of Strategy Functional Strategy Business (Division Level) Strategy Corporate Strategy ManufacturingFinance Marketing Research and Development Human Resources Strategic Business Unit Strategic Business Unit Strategic Business Unit Corporate Headquarters
• 12.
  Policies Broad guidelines formaking decisions. E.g. - 3M’s policy requiring researchers to spend 15% of their time working on something other than their primary project.
• 13.
  Strategy Implementation The processof putting strategies and policies into action through the development of:  Programs - statements of activities or steps needed to accomplish a single-use plan.  Budgets - statements of a corporation’s programs in dollar terms.  Procedures - systems of sequential steps or techniques that describe in detail how to perform particular tasks or jobs.
• 14.
  Evaluation and Control Theprocess of monitoring corporate activities and performance results so that actual performance can be compared with desired performance.
• 15.
  Strategic Decision-Making Process Reviewand Revise as Necessary: • Mission • Objectives Generate and Evaluate Strategic Alterna- tives Select and Recommend Best Alternative Implement Strategies: • Programs • Budgets • Procedures Evaluate and Control Strategy Implementation Step 7 5(b) 6(a) 6(b) 7 8 Analyze External Factors: • Opportun- ities • Threats Scan and Assess Internal Environment: • Structure • Culture • Resources Analyze Internal Factors: • Strengths • Weak- nesses Select Strategic Factors (SWOT) in Light of Current Situation Scan and Assess External Environment: • Societal • Task Evaluate Current Performance Results Examine and Evaluate the Current: • Mission • Objectives • Strategies • Policies Review Corporate Governance: • Board of Directors • Top Man- agement Strategy Formulation: Steps 1 – 6 3(a) 1(a) 1(b) 2 5(a) 4(a) 3(b) 4(b) Evaluation and Control: Step 8