Introduction to Strategic Management

By Dr Nazrul Islam

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Preview
Overview Strategic Planning Model Strategic Managers & Leadership Strategy as an Emergent Process Strategic Planning in Practice Improving Strategic Decision Making

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The Main Components of the Strategic Planning Process

FIGURE 1.1
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Introduction
What is strategy?
An action a company takes to attain superior

performance.

What is the strategic management process?

The process by which managers choose a set of

strategies for the enterprise to pursue its vision.

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Strategic Planning
Missions and Goals

(Continued) A Basic Strategic Planning Model

Figure 1.1: Basic Strategic Planning Process

External Analysis - Opportunities and Threats Internal Analysis - Strengths and Weaknesses Selection of Appropriate Strategies

Implementation of Strategies

Lets Look More Closely at Each Step . . .

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Mission and Goals

Mission
Sets out why the organization

exists and what it should be doing.

Major goals
Specify what the organization hopes

to fulfill in the medium to long term.

Secondary goals
Are objectives to be attained that lead to superior

performance.
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External Analysis
Identify strategic opportunities and threats in the operating environment.

Immediate (Industry)

Macroenvironment

National

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Internal Analysis
Identify strengths
Quality and quantity of resources available
Distinctive competencies

Identify weaknesses
Inadequate resources
Managerial and

organizational deficiencies

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Strategic Planning
SWOT and Strategic Choice

(Continued)

Weaknesses

Opportunities

Strengths

Threats

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Strategic Planning
SWOT and Strategic Choice
(Continued)

(Continued)

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Business-Level Strategies
Cost leadership
Attaining, then using the lowest total cost basis as a

competitive advantage.

Differentiation
Using product features or services to distinguish the

firms offerings from its competitors.

Market niche focus

Concentrating competitively on

a specific market segment.

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Functional-Level Strategies
Focus is on improving the effectiveness of operations within a company.
Manufacturing Marketing

Materials management
Research and development Human resources

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Global-Level Strategies
Multidomestic / Miltinational International Global Transnational

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Four Basic Strategies

High
Global Strategy Transnational Strategy

Cost pressures Low

International Strategy Multinational Strategy

Low

High Pressures for local responsiveness

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Corporate-Level Strategies
Vertical integration Diversification Strategic alliances Acquisitions New ventures

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Strategy Implementation
1. Designing organizational structure 2. Designing control systems
Market and output controls Bureaucratic controls Control through organizational culture
Structure

or Clan control Rewards and incentives

Controls

3. Matching strategy, structure, and controls

Congruence (fit) among strategy,

structure, and controls

Strategy

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Strategic Planning
Designing Organizational Structure

(Continued)

Strategy Implementation

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Managing Strategic Change

The only constant is change. Success requires adapting strategy and structure to a changing world. The feedback loop in Corporate strategic planning.
Operational Business

Functional
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Strategic Managers
General managers
Responsible for the overall (strategic) performance

and health of the total organization.

Operations managers
Responsible for specific business

functions or operations.

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Strategic Managers for All Levels

FIGURE 1.2
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Strategic Leadership
1. 2. 3. 4. Vision and consistency Commitment to the vision Being well informed Willingness to delegate and empower 5. Smart use of power 6. Emotional intelligence

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