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Basic Concepts of Strategic Management

This PowerPoint presentation covers the basic concepts of strategic management, including strategic management definition, business policy, strategic management model, environmental evaluation, and control, and strategy formulation.

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Basic Concepts of Strategic Management

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  1. Chapter 1 Basic Concepts of Strategic Management PowerPoint Slides Anthony F. Chelte Western New England College Chapter 1 Wheelen/Hunger

  2. Strategic Management Defined: Set of managerial decisions and actions that determines the long-run performance of a firm. Chapter 1 Wheelen/Hunger

  3. Business Policy Defined: General management orientation that looks inward for properly integrating the firm’s functional activities. Chapter 1 Wheelen/Hunger

  4. Strategic Management Model Environmental Evaluation and Control Strategy Strategy Evaluation and Control and Control Scanning Formulation Implementation Mission External Reason for Societal existence Objectives Environment General Forces What results to Strategies Task accomplish Environment by when Plan to Industry Analysis achieve the Policies mission & Internal objectives Broad guidelines for Programs Structure Process decision to monitor Chain of Command making Activities performance needed to Budgets Culture and take accomplish corrective Beliefs, Expectations, a plan Cost of the action Values programs Procedures Resources Sequence Assets, Skills of steps Competencies, needed to Knowledge Performance do the job Feedback/Learning Chapter 1 Wheelen/Hunger

  5. Basic Model of Strategic Management Four Basic Elements Chapter 1 Wheelen/Hunger

  6. Environmental Scanning Defined: The monitoring, evaluating, and disseminating of information from the external and internal environments to key people within the firm. Chapter 1 Wheelen/Hunger

  7. Environmental Scanning Chapter 1 Wheelen/Hunger

  8. Environmental Scanning Identify strategic factors • SWOT Analysis • Strengths, Weaknesses • Opportunities, Threats • Internal Environment • Strengths & Weaknesses • Within the organization but not subject to short-run control of management • External Environment • Opportunities & Threats • External to the organization but not subject to short-run control of management Chapter 1 Wheelen/Hunger

  9. Strategy Formulation Defined: Development of long-range plans for the effective management of environmental opportunities and threats in light of corporate strengths and weaknesses. Chapter 1 Wheelen/Hunger

  10. Strategy Formulation Mission Statement • Purpose or reason for the organization’s existence • Promotes shared expectations among employees • Communicates public image important to stakeholders • Who we are, what we do, what we’d like to become Chapter 1 Wheelen/Hunger

  11. Strategy Formulation Maytag Corporation Mission Statement To improve the quality of home life by designing, building, marketing, and servicing the best appliances in the world. Chapter 1 Wheelen/Hunger

  12. Strategy Formulation Objectives • The end results of planned activity • What is to be accomplished • Time in which to accomplish it • Quantified when possible Chapter 1 Wheelen/Hunger

  13. Strategy Formulation Goals vs. Objectives A goal is an open-ended statement of what one wants to accomplish with no quantification of what is to be achieved and no time criteria for completion. Chapter 1 Wheelen/Hunger

  14. Goals & Objectives Corporate goals and objectives include: • Profitability (net profits) • Growth (increase in total assets, etc.) • Utilization of resources (ROE or ROI) • Market leadership (market share) Chapter 1 Wheelen/Hunger

  15. Strategies Defined: A strategy of a corporation forms a comprehensive master plan stating how the corporation will achieve its mission and objectives. It maximizes competitive advantage and minimizes competitive disadvantage. Chapter 1 Wheelen/Hunger

  16. Strategies 3 Types of Strategy • Corporate strategy • Business strategy • Functional strategy Chapter 1 Wheelen/Hunger

  17. Strategies Corporate Strategy • Stability • Growth • Retrenchment Chapter 1 Wheelen/Hunger

  18. Strategies Business Strategy • Competitive strategies • Cooperative strategies Chapter 1 Wheelen/Hunger

  19. Strategies Functional Strategy • Technological leadership • Technological followership Chapter 1 Wheelen/Hunger

  20. Hierarchy of Strategy Corporate Strategy Business (Division Level) Strategy Functional Strategy Chapter 1 Wheelen/Hunger

  21. Policies Defined: Broad guidelines for decision making that link the formulation of strategy with its implementation. Chapter 1 Wheelen/Hunger

  22. Strategy Implementation Programs Strategy Implementation Budgets Procedures Chapter 1 Wheelen/Hunger

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