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Chapter 6 - Strategic Management

The document outlines the strategic management process which involves establishing a mission and vision, assessing the current reality through tools like SWOT analysis and Porter's five forces, formulating a grand strategy using approaches such as diversification and BCG matrix, and implementing and controlling the strategy through execution and monitoring performance. The goal is to create a unique and valuable position for the organization through strategic planning and management.

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nadine
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Download as PPTX, PDF, TXT or read online on Scribd
382 views

Chapter 6 - Strategic Management

The document outlines the strategic management process which involves establishing a mission and vision, assessing the current reality through tools like SWOT analysis and Porter's five forces, formulating a grand strategy using approaches such as diversification and BCG matrix, and implementing and controlling the strategy through execution and monitoring performance. The goal is to create a unique and valuable position for the organization through strategic planning and management.

Uploaded by

nadine
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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STRATEGIC MANAGEMENT

Today’s Outline
1. What is effective strategy?
2. The strategic management process
3. Establishing the mission and vision
4. Assessing the current reality
5. Formulating the grand strategy
6. Implementing & controlling strategy: execution
WHAT IS EFFECTIVE
STRATEGY?
What is strategy?
Strategy...
is a large-scale action plan that sets the direction for an
organization.

Strategic Management...
is a process that involves managers from all parts of the
organization in the formulation and the implementation of
strategies and strategic goals.
Principles of effective strategy

STRATEGY IS THE CREATION OF A UNIQUE &


VALUABLE POSITION

STRATEGY REQUIRES TRADE-OFFS IN COMPETING

STRATEGY INVOLVES CREATING A “FIT” AMONG


ACTIVITIES
THE STRATEGIC
MANAGEMENT PROCESS
The Five Steps of the Strategic-Management Process

Establish Asses the Formulate Maintain


Implement
the mission current the grand strategic
the strategy
and vision reality strategy control
Step 1: Mission and Vision
Mission Statements: Does your company’s mission statement answer these question?
1. Who are our customer? 5. What is our commitment to 8. What are our public
economic objectives? responsibilities, and what
image do we wish to project?
2. What are our major products 6. What are our basic beliefs, 9. What is our attitude toward
or service? values, aspirations, and our employees?
philosophical priorities?
3. In what geographical areas 7. What are our major strength
do we compete? and competitive advantage?
4. What is our basic technology?
Vision Statements: Does your company’s vision statement answer “yes” to these question?
1. Is it appropriate for the 3. Does it clarify purpose and 6. Does it reflect the uniqueness
organization and for the time? direction? of the organization, its
2. Does it set standards of 4. Does it inspire enthusiasm distinctive competence, what
excellence and reflect high and encourage commitment? it stands for, what it’s able to
ideals? 5. Is it well articulated and achieve?
easily understood? 7. Is it ambitious?
Example: Indofood
Step 2: Assess The Current Reality
Current reality assessment: to look at where the organization
stands and see what is working and what could be different so as
to maximize efficiency and effectiveness in achieving the goals

It can be done with 5 ways


1. Competitive intelligence
2. SWOT Analysis
3. Forecasting
4. Benchmarking
5. Porter’s 5 competitive forces
SWOT Analysis
Forecasting
Forecast is a vision or projection of a future

1. TREND ANALYSIS; A HYPOTHETICAL EXTENSION OF A PAST SERIES OF EVENTS


INTO THE FUTURE

TING ALTERNA TIVE


CY PL ANNI NG : PR ED IC
2. CONTINGEN
FUTURES
Porter’s Five Competitive Forces

1. Threats of new Entrants.

2. Bargaining power of suppliers.

3. Bargaining power of buyers.

4. Threats of substitute products or services.

5. Rivalry among competitors.


Step 3: Formulate Grand Strategy
3 common grand strategy

THE STABILITY THE DEFENSIVE


THE GROWTH STRATEGY
STRATEGY STRATEGY
“INVOLVES REDUCTION IN
“INVOLVES
“INVOLVES LITTLE OR
OR NO
“INVOLVES
“INVOLVES EXPANSION”
EXPANSION” THE
THE ORGANIZATION’S
ORGANIZATION’S
SIGNIFICANT CHANGE”
EFFORTS”
EFFORTS”
3 technique of formulating grand strategy
1. Porter’s four competitive strategy

FOCUSED- Offering Unique & Superior Value for a Narrow Market


DIFFERENTIATION

Keeping Costs & Price Low for a Narrow Market


COST-FOCUS

Offering Unique & Superior Value for a Wide Market


DIFFERENTIATION

Keeping Costs & Prices Low for a Wide Market


COST-LEADERSHIP
PORTER’S FOUR COMPETITIVE
STRATEGIES:
3 technique of formulating grand strategy
2. Single product vs diversification strategy

Single Product Diversification

Benefit: Benefit:
Focus Reduced risk,
Efficiency, Synergy

Unrelated and
Disadvantage: related
Vulnerable diversification
3 technique of formulating grand strategy
3. BCG Matrix
Step 4 & 5 Implementing and Controlling Strategy

Execution: Getting Things Done

Is not simply tactics, its a central part of any company’s


strategy;

It consists of using questioning, analysis, and follow-


through in order to mesh strategy with reality ,

Align people with goals, and achieve results promised.


Step 4 & 5 Implementing and Controlling Strategy
Strategic control consists of monitoring the execution of strategy
and making adjustments, if necessary

Bryan Barry suggests, do....


• Engage People
• Keep it Simple
• Stay Focused
• Keep Moving

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