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BA 469 Strategic Management and Business Policy

BA 469 Strategic Management and Business Policy. Introductions. Name Major What do you think you want to be doing 5 years from now and where?. Focus: General Management of an organization. An organization is “a system of consciously coordinated activities or forces of two or more persons.”.

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BA 469 Strategic Management and Business Policy

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  1. BA 469Strategic Management and Business Policy

  2. Introductions • Name • Major • What do you think you want to be doing 5 years from now and where?

  3. Focus: General Management of an organization An organization is “a system of consciously coordinated activities or forces of two or more persons.”

  4. General management perspective • Strategic decisions: strategy comes from “strategos,” used in ancient times to refer to administrator of conquered regions, therefore the whole “enterprise” • Beyond functional areas: for example, a company’s policy on what type of customers to go after affects marketing, production, finance, etc. • Long-term implications

  5. Learning Outcomes • Knowledge of strategic management tools and concepts • Diagnose strategic situations (as described in cases) using these tools and concepts • Contribute to class and small group discussions

  6. To Measure Achievement of Learning Outcomes • Quizzes - 400 points • At least 7 quizzes, short essay questions. • Will be based on concepts covered in chapter assigned for the week and readings, but may refer to previously assigned cases, etc. • Case briefs (4) – 200 points • Strategic Management reports (2) – 300 points • Participation – 100 points

  7. Requirements • Case briefs and reports are due beginning of class (see schedule) • Chapter outlines will be posted, and will be used as background to lecture and discussion.

  8. Requirements • Read Chapters and Cases before coming to class • Read assigned articles (if any) • BECOME AN ACTIVE MEMBER OF THE CLASS • House rules: • Informal, but remember why we are in class • Speak up (clarification, disagreement, etc.) • Keep distractions to a minimum

  9. Minimize Distractions • Shut off cell phones or place them in silent mode (a vibrating cell phone is distracting) • Come to class on time; if you do arrive late, enter rear door • Tolerate differences of opinion and manner of participating • If you have strong opinions, voice it and be heard, listen to responses, engage in a dialogue, and then allow the class to move on • Other suggestions?

  10. The Strategic Management Process Chapter 1

  11. The Strategic Management Process • Corporate mission and goal • Analyze external environment - - identify opportunities and threats • Analyze internal environment - - identify strengths and weaknesses • Formulate strategy • Implement strategy

  12. Strategic Management and You • Where do you want to be 5 years from now? • At least most of you had some idea • Product of an internal assessment – what are my strengths, preferences,etc. • Most students, non-students for that matter usually do not assess external environment • Strategy – university degree (some will talk about a masters degree), funding, etc.

  13. Why do some organizations succeed while others fail? • Depends on strategy or set of • Actions managers take to achieve one or more of an organization’s goals • Strategic management process • The process by which managers choose a set of strategies that will allow a company to achieve superior performance

  14. Superior Performance and Competitive Advantage • Profitability • A measure of a company’s return on its invested capital • Superior performance • One company’s profitability relative to that of other companies in the same or similar business or industry

  15. Firm-Specific Performance and Profitability • Competitive advantage • A firm’s profitability is greater than the average profitability for all firms in its industry • Sustained competitive advantage • A firm maintains competitive advantage for a number of years • Business model • Management’s model of how strategy will allow the company to gain competitive advantage and achieve superior profitability

  16. Industry Structure and Profitability Return on Invested Capital in Selected Industries, 1997-2001 Data Source: Value Line Investment Survey

  17. Performance in Nonprofit Enterprises • Government agencies, universities, charities • Are not in business “to make a profit” • Should use their resources efficiently and effectively • Set performance goals unique to the organization • Set strategies to achieve goals and compete with other nonprofits for scarce resources

  18. Strategic Managers • General managers • Responsible for overall company performance or divisional performance • Functional managers • Responsible for supervising a particular task or operation • Example – head of accounting or marketing, chief financial officer,

  19. Levels of Strategic Management

  20. Key Question for Each Level • Corporate Strategy – what business(es) should the organization be in? • Business Strategy – how should the organization compete? • Functional Strategy – how should the organization’s resources be best employed to support business strategy?

  21. Reality Check:What do managers do? • Phone calls, meetings, run around from place to place . . • Minor decisions -- Mr. so and so gets to use the office in the basement • Major decisions - - lets launch, abort • All in a day’s work - - focus

  22. Reality Check:Can managers predict the future? • National economy - - Where will interest rates be next month? Will economic growth be 2.5% or 2.75%? Does it matter? • Industry performance • Actions of competition • Actual capabilities and performance of internal resources, i.e. your people

  23. Emergent vis Intended Strategy • Honda story is a classic; also consider Toys ‘R’ Us • Scenario planning to cover possibilities, find, if possible, unknown unknowns • Listen to field people • Balance commitment to goal and realities of a changing situation • Serendipity (unintended, accidental, sometimes wonderful discoveries)

  24. Cognitive Biases • Prior hypothesis - - rules of thumb, deeply held beliefs • Escalating commitments • Reasoning by analogy • Representativeness

  25. ExercisesStrategy in Action • 1.1 and 1.2: Microsoft – we can assume that some sort of planning went into Microsoft’s original Internet strategy prior to 1994. How could they miss the Internet then? • 1.4: Duke Energy – explain Duke’s planning process using Scenarios.

  26. Strategic Management Process • Not an exact science • Dealing with • Uncertainty • Scope • Personal judgment • Focus on process

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