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STRATEGIC MANAGEMENT

STRATEGIC MANAGEMENT. The Dynamics of Strategic Planning. Strategy large-scale action plan that sets the direction for an organization Strategic management

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STRATEGIC MANAGEMENT

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  1. STRATEGIC MANAGEMENT

  2. The Dynamics of Strategic Planning • Strategy • large-scale action plan that sets the direction for an organization • Strategic management • process that involves managers from all parts of the organization in the formulation and the implementation of strategies and strategic goals

  3. What Is an Effective Strategy? • Strategic positioning • Sustainable competitive advantage by preserving what is distinctive about a company • Being responsive to customers • Innovation • Quality • Effectiveness • The creation of a unique, valuable, inimitable position

  4. LEVELS OF STRATEGY • Corporate • What set of businesses should be in? • Business • How should we compete in business? • Functional • What should our strategy be in each functional area?

  5. CORPORATE STRATEGY: BASIC QUESTIONS • Grand Strategy • Stability • Growth • Retrenchment • Single Product vs. Diversification

  6. Single-Product versus Diversification • Single-product strategy • company makes and sells only one product within its market • Benefit? • Risk?

  7. Single-Product versus Diversification • Diversification • operating several businesses under one ownership that are not related to one another • Related, unrelated • Benefits?

  8. CORPORATE STRATEGY:TOOLS • Portfolio Matrix • BCG Matrix

  9. The Product Life Cycle

  10. BCG MATRIX Market Share HIGH LOW HIGH Growth LOW

  11. BUSINESS-LEVEL STRATEGY • 5 forces • SWOT • Generic Strategies

  12. Entry Barriers Economies of Scale Brand Identity Capital Requirements Rivalry Determinants Industry Growth Fixed Costs Product Differences Brand Identity Exit Barriers New Entrants Determinants of Supplier Power Switching Costs Supplier Volume Impact Forward Integration Industry Competitors Intensity of Rivalry Suppliers Buyers Determinants of Buyer Power Buyer Concentration Buyer Volume Backward Integration Determinants of Substitution Threat Relative Price Performance Switching Costs Substitutes

  13. S W O T S.W.O.T. ANALYSIS • S W O T represents the first letter in • S trengths • W eaknesses • O pportunities • T hreats • Strategy-making must be well-matched to both • A firm’s resource strengths and weaknesses • A firm’s best market opportunities and externalthreats to its well-being

  14. 4 GENERIC STRATEGIES Lower Cost Differentiation Broad Target Scope Narrow Target

  15. The Strategic Management Process

  16. The Three Core Processes of Business People Strategy Operations

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