Overview of Strategic Management Concepts

1. Overview of Strategic Management Concepts

2. Three Themes • Global Considerations Impact Virtually All Strategic Decisions • Information Technology Has Become a Vital Strategic Management Tool • Preserving the Natural Environment is an Important Strategic Issue

3. Global Considerations Impact Virtually All Strategic Decisions Which foreign languages should I learn? Should we import? Will NAFTA affect our firm? Should we export?

4. Information Technology Has Become A Vital Strategic Management Tool What functions shall we include on our Web site? Should we upgrade our PCs? Should we buy our sales staff laptops? Should we outsource MIS?

5. Preserving the Natural Environment is an Important Strategic Issue How can our waste be reduced? Is our firm environmentally friendly? How can we recycle? Will Congress pass tougher laws?

6. The Definition of Strategic Management The Art and Science of Formulating, Implementing, and Evaluating Cross-Functional Decisions That Enable an Organization to Achieve Its Objectives

7. The Basis for Good Strategic Decisions Intuition + Analysis Effective Strategic Decisions

8. Ten Key External Forces Competitive Economic Technological Social Governmental Cultural Political Demographic Environmental Legal

9. Economic Forces: Examples of Variables To Be Monitored Level of Disposable Income Interest Rates Inflation Rates Unemployment Trends Value of the Dollar Abroad Tax Rates Budget Deficits Stock Market Trends Economic Conditions Abroad

10. Economic Forces: Examples of Variables To Be Monitored Level of Disposable Income Interest Rates Inflation Rates Unemployment Trends Value of the Dollar Abroad Tax Rates Budget Deficits Stock Market Trends Economic Conditions Abroad

11. Social, Cultural, Demographic, and Environmental Forces: Examples of Variables to be Monitored Per Capita Income Levels of Disposable Income Population Changes By Race, Age, & Area Attitudes Towards Leisure Time Average Level of Education Attitudes Towards Customer Service Regional Changes in Tastes and Preferences Rising Consciousness for the Natural Environment

12. Political, Governmental, & Legal Forces: Examples of Variables to be Monitored Government Regulations and Deregulation Special Tariffs Environmental Protection Laws U.S. - Foreign Country Relationships Import-Export Regulations World Oil, Currency, and Labor Markets The Rise of Democracies Worldwide Local, State, National, and Foreign Elections

13. Key Questions About Competitors Who are our competitors? What are Competitors’ Objectives? Where are our competitors located? What are Competitors’ Strengths? What are Competitors’ Weaknesses? How Vulnerable are we to our Competitors’ Strategies?

14. Fourteen Key Internal Forces Management Marketing Manufacturing Production/ Operations Research & Development Purchasing Distribution

15. Key Internal Forces (cont.) Finance/Accounting Promotion Packaging Employee/Manager Relations Human Resource Management Computer Information Systems Vendor Relations

16. Keys to Formulating Strategies Business Mission Internal Strengths and Weaknesses External Opportunities and Threats Strategy Formulation

17. A Comprehensive Strategic Management Model Feedback Perform External Audit Develop Mission Statement Establish Long- term Objectives Generate, Evaluate, and Select Strategies Establish Policies and Annual Objectives Allocate Resources Measure and Evaluate Performance Perform Internal Audit Strategy Formulation Strategy Implementation Strategy Evaluation

18. Benefits of Strategic Management - Improved Communication - Increased Understanding - Enhanced Commitment - Greater Productivity - More Effective Strategies - Less Waste - Allow Firm to Influence, Initiate, and Anticipate - Be Proactive Rather Than Reactive