The Strategic Management

Process

The Strategic Mangement

Process

What is Strategic Mangement

Alternative Perspectives on Strategy
Development
Strategic Thinking in a Turbulent Global
Environment

What is Strategic Mangement?

External and Internal Environmental

Analysis
Strategic Leadership and Strategic
Direction
Business and Corporate Strategy
Formulation

Strategy Implementation and Control

Strategic Restructuring

What is Strategic Mangement?

A process through which organizations

Analyze and learn from their internal and

external environments

Establish strategic direction

Create strategies to achieve established goals

Execute strategies

Satisfy key organizational stakeholders

What is Strategic Management

What is Strategic Management

External and Internal Environmental Analysis

Broad environment

Domestic and global environmental forces

Sociocultural
Technological
Political economic trends

Forms the context within which the firm and its

task environment exist

What is Strategic Management

External and Internal Environmental Analysis

Task environment consists of external

stakeholders
External Stakeholder

Groups or individuals outside the organization

influenced by or have a major impact on the
organization
Customers, suppliers, competitors, government
agencies and administrators, etc.

What is Strategic Management

External and Internal Environmental Analysis

Internal Stakeholders also have a stake in

the outcomes of an organization
Internal Stakeholders include

Managers

Employees

Owners and their representatives (e.g., board of

directors)

What is Strategic Management

External and Internal Environmental Analysis

Strengths

Resources

Capabilities

Competitive
advantage

Weaknesses

Lack of Resources

Lack of Capabilities

Competitive
disadvantage

Opportunities

Conditions inthe broad and

task environments
Allow a firm to
Take advantage of
organizational strengths
Overcome organizational
weaknesses
Neutralize environmental
threats
Threats

What is Strategic Mangement?

Strategic Leadership and Strategic Direction

A Strategic leader establishes

direction

Strategic direction

Enduring goals

Objectives of the organization

Ethics -- moral standards by

which people judge behavior

What is Strategic Mangement?

Strategic Leadership and Strategic Direction

Mission -- enduring part of planning

processes within the organization

Short

Only defines the companys business

Comprehensive

Encompasses both business definition and

organizational values

What is Strategic Mangement?

Business and Corporate Strategy Formulation

Strategy

Organizational plan of action intended to

move an organization toward

Achievement of shorte-term goals

Achievement fundamental purposes

Often divided into three levels

Corporate

Business

Functional

What is Strategic Mangement?

Business and Corporate Strategy Formulation

Business strategy formulation (Chapter 5)

Domain direction

Navigation

Corporate strategy formulation( Chapter 6)

Domain definition
Selection of business areas in which the
organization will compete

Functional strategy formulation

Contains the details of how the functional

areas such as marketing, operations, finance,

What is Strategic Mangement?

Business and Corporate Strategy Formulation

What is Strategic Management?

Strategy Implementation and Control

Strategy implementation (Chapter 7)

Involves creating

Functional strategies

Systems

Structures

Processes

Achievement of strategic ends

What is Strategic Management?

Strategy Implementation and Control

Strategic Control (Chapter 8)

Processes that lead to adjustments in

Strategic direction

Strategies

Implementation plan when necessary

May be necessary to

Collect new information

Revaluate assessment of the environment

What is Strategic Mangement?

Strategic Restructuring

Restructuring (Chapter 8)

Typically involves a renewed emphasis on

the things an organization does well
Combines a variety of tactics to

Revitalize the organization

Strengthen its competitive position

Popular restructuring tactics

Refocusing corporate assets on a more limited

set of activities

ALTERNATIVE PERSPECTIVES
ON STRATEGY
DEVELOPMENT

Industrial Organization Economics

The Resource-Based View of the Firm

The Stakeholder Perspective

A Combined Approach

ALTERNATIVE PERSPECTIVES ON
STRATEGY DEVELOPMENT
Industrial Organization Economics

Environmental determinism

good management is associated with

determining, timing, and implementing a
strategy will best fit

Environmental

Technical

Human forces

Successful organization will be the one that best

adapts to existing forces

ALTERNATIVE PERSPECTIVES
ON STRATEGY DEVELOPMENT
The Resource-Based View of the Firm

an organization is a bundle of resources,

which fall into the general categories of

Financial resources

physical resources

human resources

knowledge and learning resources

general organizational resources

ALTERNATIVE PERSPECTIVES ON
STRATEGY DEVELOPMENT
The Resource-Based View of the Firm

It may lead to a sustainable competitive

advantage if a resource that firm posses is

Valuable

Rare

Recognized by the firm and the firm is taking

advantage of it
Difficult to imitate, either by direct imitation or
substitution for another resource

ALTERNATIVE PERSPECTIVES ON
STRATEGY DEVELOPMENT
The Stakeholder Perspective

Stakeholder analysis

Identifying and prioritizing key stakeholders

Assessing stakeholder needs

Collecting ideas from stakeholders

Integrating this knowledge into strategic

management processes

Establishment of strategic direction

Formulation and implementation of strategies

ALTERNATIVE PERSPECTIVES ON
STRATEGY DEVELOPMENT
Stakeholder management

Communicating

Negotiating

Contracting

Managing relationships with stakeholders

Motivating stakeholders to behave in ways

that are beneficial to the organization

ALTERNATIVE PERSPECTIVES ON
STRATEGY DEVELOPMENT
Stakeholder management

Communicating

Negotiating

Contracting

Managing relationships with stakeholders

Motivating stakeholders to behave in ways

that are beneficial to the organization

Stakeholder management

ALTERNATIVE PERSPECTIVES
ON STRATEGY
DEVELOPMENT
A Combined Approach management

Strategic management process model

Complimentary theories rather than
competing perspectives
balanced approach provides the opportunity
to integrate multiple perspectives into a
comprehensive set of strategic plans

STRATEGIC THINKING IN A
GLOBAL ENVIRONMENT

Entrepreneurship is the process through

which individuals,
groups, or firms pursue opportunities to
create new value
Entrepreneurship involves

Recognizing or creating an opportunity

assembling the resources necessary to pursue it

managing those resources to bring the new

venture into being

Entrepreneurship can occur both within

STRATEGIC THINKING IN A
GLOBAL ENVIRONMENT
Characteristics of Strategic Thinking

Intent Focused

Long-Term Oriented

Consideration of Past and Present

Systems Perspective

Ability to Seize Opportunities

Scientific Approach

KEY POINTS SUMMARY

Strategic management process includes

Activities of internal and external analysis

Establishment of strategic direction

Development of organizational strategies

Corporate levels

Business levels

Implementation plan

Development

Execution

Establishment of strategic controls

KEY POINTS SUMMARY

Traditional process for developing strategy

Situation Analysis

(SWOT) consists of analyzing the

organizations internal and external
environments

Strengths

Weaknesses

Opportunities

Threat

Results are the basis for developing

Missions

Goals

Key Points Summary

Deterministic View of Strategy

Key role of managers is to determine and

implement which strategy will best fit

Environmental forces

Technical forces

Human forces

Organizations create their environments

through

Strategic alliances with stakeholders

Advertising

Political lobbying

Key Points Summary

Industrial Organization Economics

Firm performance is a function of

Structural characteristics

Conduct of firms in an industry

Managers should devise strategies that

take advantage of industry characteristics

Key Points Summary

The Resource-Based View of the Firm

Organization as a bundle of resources

Managers

Acquire and manage resources

Organization achieves sustainable

competitive advantages
Superior performance

Key Points Summary

Stakeholder Theory

perspective of the internal and external

constituencies that have an interest in the
organization
Managers foster mutually beneficial
relationships with the firms stakeholders.
Firms that treat their stakeholders well
create more value

Key Points Summary

Globalization

Iincreasing interdependencies between

countries due to international flow of

Goods and services

Knowledge

Financial capital

Global inter-dependencies make the

business environment very complicated
Economic interconnections have increased
competition

Key Points Summary

Strategic Thinking

Creative aspects of the strategic

management process
Entrepreneurship --process through which
individuals, groups, or firms pursue
opportunities to create new value
Strategic thinking involves

Strategic intent

Long-term perspective

Consideration of the past and the present,

Total systems orientation

The Strategic Mangement

Process

What is Strategic Mangement

Alternative Perspectives on Strategy
Development
Strategic Thinking in a Turbulent Global
Environment

The Strategic Management

Process

The End