08-CH VIII by usmanjee123

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									INTRODUCTION TO
  MANAGEMENT
   PRINCIPALS
 CHAPTER VIII


 STRATEGIC
MANAGEMENT
             SEQUENCE
1.0 The Importance of Strategic
    Management

2.0 The Strategic Management Process

3.0 Types of Organizational Strategies

4.0 Strategic Management in Today’s
    Environment
 1.0 The Importance of Strategic
          Management
1.1 Strategic Management



1.2 Effectiveness of Strategic Management
1.1 STRATEGIC MANAGEMENT
That sets of managerial decisions and
actions that determines the long run
performance of an organization.
2.0 Strategic Management Process
2.1 Steps in the Strategic Management
    Process

2.2 Managers Function in External &
    Internal Analysis

2.3 Role of Resources, Capabilities and
    Core Competencies in the Internet
    Analysis
                2.0 THE STRATEGIC
              MANAGEMENT PROCESS
A
                              External Analysis
                               • Opportunities
                                  •Threats


Identify the Organization's   SWOT Analysis        Formulate    Implement    Evaluates
    Current Mission,                               Strategies   Strategies    Results
       and strategies
                               Internal Analysis
                                  • Strengths
                                 • Weakness
     2.1 STEPS IN STRATEGIC
      MANAGEMENT PROCES
Step 1.    Identifying the Organization’s
           Current Mission, Objectives and
           Strategies.
Step 2.    External Analysis
  – Opportunities : Positive trends in External
    Environmental Factors
  – Threats : Negative trends in External
    Environmental Factors
Step 3.   Internal Analysis
  – Strengths : Any activities the organization
    does well or any unique resources that it has
  – Weaknesses : Activities the organization does
    not do well or resources it needs but does not
    possess.
  – Core Competencies : The organization’s
    major value-creating skills, capabilities and
    resources that determine its competitive
    weapons.
  – SWOT Analysis : An analysis of the
    organization’s strengths, weaknesses,
    opportunities and threats.
Step 4.   Formulating Strategies

Step 5.   Implementing Strategies

Step 6.   Evaluating Results
Identifying the Organization’s
         Opportunities



 Opportunities                    Organization’s
                 Organization’s
    in the                          Resources
                 Opportunities
 Environment                       /Capabilities
      3.0 Types of Organizational
              Strategies
3.1 Three Growth Strategies
3.2 BCG Matrix and Its Uses
3.3 SBUs and Business-Level Strategies
3.4 Role of Competitive Advantage in
    Business Level Strategies
3.5 Proter’s Five Forces Model
3.6 Three Generic Competitive Strategies
3.0 TYPES OF ORGANIZATIONAL
      LEVEL STRATEGIES
3.1     CORPORATE LEVEL STRATEGY

        An organizational strategy that seeks to determine what
        business a company should be in or wants to be in

•       Growth
        A corporate level strategy that seeks to increase the
        organization’s operations by expanding the number of products
        offered or markets served.
    -   Related Diversification
        When a company grows by merging with or acquiring
         firms in different but related industries
    -   Unrelated Diversification
        When a company grows by merging with or acquiring firms
        in different and unrelated industries
•       Stability Strategy
        A corporate level strategy characterized by
        an absence of significant change.
•       Renewal Strategy
        A corporate level strategy designed to
        address organizational weakness that are
        leading to performance declines.
    -   Retrenchment Strategy
        A short run renewal strategy
    -   Turnaround Strategy
        A renewal strategy for situations in which the
        organization’s performance problems are
        more serious.
3.2 CORPORATE PORTFOLIO
    ANALYSIS (BCG MATRIX)
  - Cash Cows
  - Stars
  - Question Marks
  - Dogs
           THE BCG MATRIX
       High                                   Low
                         Market Share
       A
High   n
       t
       i
       c
       i
       p
       a
              Stars              Question Marks
       t
       e
       d

       G
       r
       o
       w
       t
       h
              Cash Cow            Dogs
       R
       a
       t
       e




 Low
3.3   BUSINESS LEVEL STRATEGY
      An organizational strategy that seeks to
      determine how an organization should
  compete in each of its      business
- Strategic Business Units (SBU)
      Single businesses of an organization in
      several     different businesses that are
  independent and        formulate their own
      strategies.

• The Role of Competitive Advantage
• Quality as a Competitive Advantage
• Sustaining Competitive Advantage
•      Competitive Strategies
  - Threat of New Entrants
  - Threat of Substitutes
  - Bargaining Power of Buyers
  - Bargaining Power of Suppliers
  - Current Rivalry
•      Cost Leadership Strategy
  A business level strategy in which the
  organization is the lowest cost producer in
  its industry
    FORCES IN THE INDUSTRY
          ANALYSIS
1
                           New
         Threat of        Entrants
                                          Bargaining
        New Entrants
                                           Power of
                                            Buyers
                        Intensity of
                       Rivalry among
    Suppliers
                          Current
                       Competitions           Buyers
       Bargaining
        Power of                        Threat of
        Suppliers                      Substitutes
                        Substitutes
                   Commonly Required                                         Common Organizational
Generic Strategy
                       Skills and Resources                                      Requirements




                   Sustanined Capital Investment
                        and access to capital
                                                                             Tight cost control
                        Process engineering skills
Overall Cost                                                                        Frequent, detailed control reports
                        Intense Supervision of Labor
     Leadership                                                                     Structured Organizaiton and
                        Products designed for ease
                                                                                    responsibilities
                        in manufacture
                        Low cost distribution system




                   Strong Marketing Abilities
                         Product Engineering
                         Creative Flair
                         Strong Capability in Basic Research
                         Corporate reputation for quality or techonlogical
Differention
                         leadership
                         Long tradition in the industry or unique
                         combinaiton of skills
                         drawn from other businesses
                         Strong cooperation from channels




                   Combination of the foregoing skills
Focus                  and resources directed at the
                       particular strategic target

								
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