Strategic Management

1. Strategic Management MGT 3310

2. Definition • Art & science of formulating, implementing, and evaluating, cross-functional decisions that enable an organization to achieve its objectives. • Analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages • Those actions (or by default, inactions) which determine the long term future of an organization.

3. Competitive Advantage • Competitive advantage — operating with an attribute or set of attributes that allows an organization to outperform its rivals. • Sustainable competitive advantage — one that is difficult for competitors to imitate. Management - Chapter 9

4. Levels of Strategy

5. Strategic Planning

6. Strategic Planning

7. Strategic Planning • Strategic Management • Environmental Analysis • The General Environment • The Economic Component • The Social Component • The Political Component • The Legal Component • The Technology Component • The Operating Environment • The Customer Component • The Competition Component • The Labor Component • The Supplier Component • The International Component • The Internal Environment

8. Strategic Planning

9. Strategic Planning

10. Strategic Planning • Strategic Management • Establishing Organizational Direction • Determining Organizational Mission • Developing a Mission Statement • The Importance of Organizational Mission • The Relationship Between Mission and Objectives

11. Mission Analysis of mission: • The reason for an organization’s existence. • Good mission statements identify: • Customers • Products and/or services • Location • Underlying philosophy • An important test of the mission is how well it serves the organization’s stakeholders. Management - Chapter 9

12. Mission Management - Chapter 9

13. Strategic Planning • Strategic Management (continued) • Strategy Formulation: Tools • Critical Question Analysis • What are the purposes and objectives of the organization? • Where is the organization presently going? • In what kind of environment does the organization now exist? • What can be done to better achieve organizational objectives in the future? • SWOT Analysis Strengths Weaknesses Opportunities Threats

14. SWOT Analysis

15. Porter’s model of five strategic forces affecting industry competition

16. Strategic Planning • Strategic Management (continued) • Strategy Formulation: Tools (continued) • Business Portfolio Analysis • The BCG Growth-Share Matrix Strategic business units (SBUs) 1. It is a single business or collection of related businesses 2. It has its own competitors 3. It has a manager who is accountable for its operation 4. It is an area that can be independently planned for within the organization Categorize each SBU as: • Stars • Cash Cows • Question Marks • Dogs • The GE Multifactor Portfolio Matrix. • The BCG Growth – Share Matrix

17. Strategic Planning

18. Strategic Planning

19. Strategic Planning • Strategic Management (continued) • Strategy Formulation: Types • Differentiation • Cost Leadership • Focus • Sample Organizational Strategies • Growth • Stability • Retrenchment • Divestiture

20. Strategic Planning • Strategic Management (continued) • Strategy Implementation 1. Interacting skill 2. Allocating skill 3. Monitoring skill 4. Organizing skill • Strategic Control Monitor and evaluate the whole strategy management process

21. Tactical Planning • Comparing and Coordinating Strategic and Tactical Planning Basic differences between strategic and tactical planning: 1. Strategic plans are usually developed by upper-level management and tactical plans by lower-level management 2. Facts on which to base strategic plans are more difficult to gather 3. Strategic plans are generally less detailed than tactical plans 4. Strategic plans cover a relatively long period of time whereas tactical plans cover a relatively short period of time

22. Tactical Planning

23. Planning and Levels of Management

24. More • Corporate governance • Principle-Agent issue • Internal Risk • Strategic Risk