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Chapter One

Chapter One. Overview of Strategic Management. Multimedia Slides by Peter J. McAliney Chenery & Company. Chapter Overview. Strategic management Strategy defined Competitive advantage Attributes of a successful firm Managers and strategy Levels of strategy. Strategic Management.

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Chapter One

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  1. Chapter One Overview of Strategic Management Multimedia Slides by Peter J. McAliney Chenery & Company

  2. Chapter Overview • Strategic management • Strategy defined • Competitive advantage • Attributes of a successful firm • Managers and strategy • Levels of strategy

  3. Strategic Management Processes People Purpose Decisions Outcomes

  4. Processes People Purpose Strategic Management External environment Decisions Outcomes Internal resources

  5. Strategic Management – Auto Industry • Economic climate/Interest rates • Energy prices • Foreign competition • Union activity Processes People Purpose Decisions Outcomes • Design/ • manufacturing resources • Ability to control processing costs • Distribution networks • Customer service demands

  6. Strategy Defined

  7. Competitive Advantage + - Profitability • Superior brand • Dominant market share • Lower cost • Higher quality Firm A Firm B

  8. Competitive Advantage

  9. Strategy Size of the firm Market share Technological leadership Innovation frequency Survival Financial outcomes Profitability What is Success? Enable

  10. The Strategic Management Process

  11. Mission Strong interrelationships between Customers Vision Value

  12. Sample Mission Statement The Coca Cola Promise: • The Coca-Cola Company exists to benefit and refresh everyone it touches. Source: http://www2.coca-cola.com/ourcompany/ourpromise.html

  13. Situation Analysis • Strengths • Weaknesses • Opportunities • Threats

  14. Situation Analysis Strengths Weaknesses Opportunities Threats • What does the company do well? • What worries other firms about your firm? • Where does the organization compete well? • What can you improve? • What is being done badly? • What is working less than optimally? • What are your competitors doing better? • What is possible? • In what businesses will you be in five years? • Who could you partner with? • What else can be done with your existing technology? • What keeps you up at night? • What are barriers to your development? • Can you fund your growth? • What new technology can unseat you?

  15. Strategic Choice Corporate Business Functional International

  16. Strategic Choice – General Motors • Auto • Financing Asia-Pacific Americas • - Pontiac • Cadillac • Accounting • Manufacturing Middle East/Africa Europe

  17. Strategic Choice – Coca Cola • Water • Soft Drinks Asia-Pacific Americas • - Coke • Sprite • Accounting • Manufacturing Middle East/Africa Europe

  18. Implementation • Competencies • Getting the job done

  19. Example: Manufacturing Competencies • Integrated communication and collaboration • Outstanding customer service • Accurate estimating and quoting • Flexible production planning • Effective project planning Source: http://www.microsoft.com/BusinessSolutions/industry/FiveCompetencies.mspx

  20. Outcome Performance How did we do? Feedback Evaluation How can we improve?

  21. Deliberate and Emergent Strategies Source: H. Mintzberg and A. McHugh, “Strategy Formulation in an Adhocracy,” Administrative Science Quarterly, 30, no.2 (1985): 160-197.

  22. Levels of Strategic Management

  23. Different Approaches to Strategy Example: Introducing New Coke Introduce new formula Coke Market new and Classic Coke Meet market demand Turn customers off to product Bring back Classic Coke

  24. Strategic Leadership • Visionary thinking • Planned preparedness • Adaptive and proactive skills • People development • Commitment to achieve the desired end

  25. Chapter Summary • Strategic management • Strategy defined • Competitive advantage • Attributes of a successful firm • Managers and strategy • Levels of strategy

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