Ch 09 Strategic Management

8/9/2019 Ch 09 Strategic Management

1/33

Copyright © 2012 PearsonEducation, Inc. Publishing asPrentice Hall

Management , Eleventh Edition by Stephen P. Robbins & Mary Coulter ©2012 Pearson Education, nc. publishin! as Prentice "all 9-1


2/33



#Defne strategic management and explainhy it!s important#Explain hat managers do during the sixsteps o" the strategic management process#Describe the three types o" corporate

strategies#Describe competiti#e ad#antage and thecompetiti#e strategies organi$ations use toget it

#Discuss current strategic management


3/33



%hat Is &trategic'anagement(# Strategic management - hat

managers do to de#elop theorgani$ation!s strategies.

# Strategies - the plans "or ho theorgani$ation ill do hat it!s in businessto do, ho it ill compete success"ully,and ho it ill attract and satis"y itscustomers in order to achie#e its goals.


4/33



%hat Is &trategic'anagement(# Business model - ho a company

is going to ma)e money.

# Focus o Business model

$ hether customers ill #alue hat thecompany is pro#iding

$ hether the company can ma)e any

money doing that

h i


5/33



%hy Is &trategic'anagement Important(

1. It results in higher organi$ationalper"ormance.

2. It re*uires that managers examine andadapt to business en#ironment changes.

+. It coordinates di#erse organi$ational units,helping them "ocus on organi$ational goals.


6/33



%hat is the &trategic'anagement Process(

# Strategic management process -a sixstep process that encompassesstrategic planning, implementation,

and e#aluation.


7/33



Exhibit -1 &trategic'anagement Process


8/33



&trategic 'anagementProcess# &tep 1 Identi"ying the organi$ation!s

current mission, goals, and strategies

$ Mission: a statement o" the purpose o" anorgani$ation

# /he scope o" its products and ser#ices

$ Goals: the "oundation "or "urther planning

# 'easurable per"ormance targets


9/33



Exhibit -2 Components o" a'ission &tatement


10/33



# &tep 2 oing an external analysis $ /he en#ironmental scanning o" specic and

general en#ironments

# ocuses on identi"ying opportunities and threats

$ In an external analysis, managers shouldexamine the economic, demographic,political3legal, sociocultural, technological, andglobal components to see the trends and

changes.


11/33



&trategic 'anagementProcess# &tep + oing an internal analysis

$ 4ssessing organi$ational resources, capabilities, andacti#ities

# &trengths create #alue "or the customer and strengthen thecompetiti#e position o" the rm.

# %ea)nesses can place the rm at a competiti#edisad#antage.

$ 4naly$ing nancial and physical assets is "airly easy, butassessing intangible assets 5employee s)ills, culture,

corporate reputation, etc.6 isn!t as simple.

# Steps 2 and 3 combined are called a SWOT analysis.(Strengths, Weaknesses, Opportunities, and Threats)


12/33



&%7/ 4nalysis

# SWO anal!sis an analysis o" theorgani$ation!s strengths, ea)nesses,opportunities, and threats.

# "esources an organi$ation!s assetsthat are used to de#elop, manu"acture,and deli#er a product to its customers.

# #apabilities an organi$ation!s s)illsand abilities in doing the or)acti#ities needed in its business.


13/33



&trengths and %ea)nesses

# Strengt$s any acti#ities theorgani$ation does ell or any uni*ueresources that it has.

# Wea%nesses acti#ities theorgani$ation does not execute ell orneeded resources it does not possess.

# #ore competencies the organi$ation!s

ma8or #aluecreating capabilities thatdetermine its competiti#e eapons.


14/33



&trategic 'anagementProcess# &tep 9 ormulating strategies

$ e#elop and e#aluate strategicalternati#es.

$ &elect appropriate strategies "or all le#elsin the organi$ation that pro#ide relati#ead#antage o#er competitors.

$ 'atch organi$ational strengths toen#ironmental opportunities.

$ Correct ea)nesses and guard againstthreats.


15/33



&trategic 'anagementProcess# &tep : Implementing strategies

$ &mplementation - e;ecti#ely ttingorgani$ational structure and acti#ities to theen#ironment.

$ /he en#ironment dictates the chosen strategy<e;ecti#e strategy implementation re*uires anorgani$ational structure matched to itsre*uirements.

# &tep = E#aluating results

$ Ho e;ecti#e ha#e strategies been(

$ %hat ad8ustments, i" any, are necessary(


16/33


17/33

Copyright © 2012 PearsonEducation, Inc. Publishing as

Prentice HallManagement , Eleventh Edition by Stephen P. Robbins & Mary Coulter ©2012 Pearson Education, nc. publishin! as Prentice "all 9-17

Corporate &trategies

# #orporate strateg! 4n organi$ationalstrategy that determines hat businesses acompany is in or ants to be in, and hat itants to do ith those businesses

# !pes o #orporate Strategies

# >roth expansion into ne products and mar)ets.

# &tability maintenance o" the status *uo.

# ?eneal examination o" organi$ational ea)nessesthat are leading to per"ormance declines.


18/33



Corporate &trategies 5cont.6

# Gro't$ strateg! a corporatestrategy that!s used hen anorgani$ation ants to expand the

number o" mar)ets ser#ed orproducts o;ered, through either itscurrent business5es6 or ne

business5es6.


19/33



/ypes o" >roth &trategies

# Concentration $ "ocuses on its primary line o" business

and increases the number o" products

o;ered or mar)ets ser#ed in thisprimary business.

# @ertical Integration

$ 4 company also might choose to groeither bac%'ard or or'ard or bot$.


20/33



# Hori$ontal Integration $ 4 company gros by combining ith

competitors.

# i#ersication $ ?elated di#ersication happens hen a

company combines ith other companiesin di;erent, but related, industries.

$ Anrelated di#ersication is hen acompany combines ith rms in di;erentand unrelated industries.


21/33



Corporate &trategies 5cont.6

# Stabilit! strateg! a corporate strategyin hich an organi$ation continues to dohat it is currently doing.

# "ene'al strateg! a corporate strategydesigned to address decliningper"ormance.


22/33



# Retrenchment strategy

$ It is a shortrun reneal strategy used "orminor per"ormance problems.

# Turnaround strategy $ %hen an organi$ation!s problems are more

serious, more drastic action need to be ta)en.

# 'anagers do to things "or both renealstrategies cut costs and restructureorgani$ational operations.


23/33



/he ?ole o" Competiti#e4d#antage# #ompetiti(e strateg! - an

organi$ational strategy "or ho anorgani$ation ill compete in its

business5es6.# #ompetiti(e ad(antage hat

sets an organi$ation apart< its

distincti#e edge.


24/33



# Strategic Business )nit *SB)+ - the single independent businesses o"an organi$ation that "ormulate their

on competiti#e strategies.# B#G matrix - a strategy tool that

guides resource allocation decisions

on the basis o" mar)et share andgroth rate o" &BAs.


25/33



Exhibit -9 BC> 'atrix


26/33



i#e Competiti#e orces

# 'any important ideas in strategicmanagement ha#e come "rom the or) o"'ichael Porter.

# In any industry, #e competiti#e "orcesdictate the rules o" competition. /ogether,these #e "orces determine industryattracti#eness and protability, hichmanagers assess using these #e "actors


27/33



Exhibit -: i#e orces 'odel


28/33




# /hreat o" e Entrants $ /he ease or diDculty ith hich ne competitors can

enter an industry

# /hreat o" &ubstitutes

$ /he extent to hich sitching costs and brand loyalty

a;ect the li)elihood o" customers adopting substituteproducts and ser#ices

# Bargaining Poer o" Buyers

$ /he degree to hich buyers ha#e the mar)et strength tohold say o#er and inuence competitors in an industry


29/33




# Bargaining Poer o" &uppliers $ /he relati#e number o" buyers to

suppliers and threats "rom substitutes

and ne entrants a;ect the buyersupplier relationship.

# Current ?i#alry

$ Intensity among ri#als increases henindustry groth rates slo, demand"alls, and product prices descend.

/ " C titi


30/33



/ypes o" Competiti#e&trategies# Cost Feadership &trategy

$ &ee)ing to attain the loest total o#erall costsrelati#e to other industry competitors

# i;erentiation &trategy

$ 4ttempting to create a uni*ue and distincti#eproduct or ser#ice "or hich customers ill pay apremium

# ocus &trategy $ Asing a cost or di;erentiation ad#antage to exploit

a particular mar)et segment as opposed to a largermar)et


31/33



%hat is a unctional&trategy(# Functional

strateg! thestrategies used by

an organi$ation!s#arious "unctionaldepartments tosupport the

competiti#estrategy.


32/33



/he eed "or &trategiclexibility# Strategic

,exibilit! theability to recogni$e

ma8or externalchanges, to *uic)lycommit resources,and to recogni$e

hen a strategicdecision as amista)e.

Ch 09 Strategic Management

Documents

Transcript of Ch 09 Strategic Management