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Introduction to Strategic Management. Successfully formulate and implement value-creating strategy Based on (sustainable) competitive advantage To earn above-average returns To create value for stakeholders. Introduction to Strategic Management. Strategic Management Process

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introduction to strategic management
Introduction to Strategic Management

Successfully formulate and implement value-creating strategy

  • Based on (sustainable) competitive advantage
  • To earn above-average returns
  • To create value for stakeholders
introduction to strategic management1
Introduction to Strategic Management

Strategic Management Process

  • Strategic Inputs: Internal and External Scanning
  • Strategic Actions: Formulation and implementation of strategy
  • Strategic Outcomes: Above, at or below average returns
introduction to strategic management2
Introduction to Strategic Management

From Organizational Vision to Tactical Steps

  • Define the Organization:
    • Vision
    • Mission Statement
  • Understand the Operating Environment
    • External Environment (Threats and Opportunities)
    • Internal Conditions (Strengths and Weaknesses)
  • Determine Strategic Alternatives
  • Formulate Strategy (long term)
  • Implement Strategy through Tactics (short term)
introduction to strategic management3
Introduction to Strategic Management

SWOT Analysis

External Analysis – EFAS Matrix (Chapter 3)

Internal Analysis - IFAS Matrix (Chapter 4)

Strategy Formulation

Alternative Strategies – TOWS Matrix (Chapter 5)

Corporate Strategy (Chapter 6)

Functional Strategy (Chapter 7)

Strategy Implementation

Organizing (Chapter 8)

Staffing (Chapter 9)

Evaluating (Chapter 10)

introduction to strategic management4
Introduction to Strategic Management

The New Competitive Landscape

The Global Economy

  • Movement of goods, services, capital/financing, technology and innovation, information, and people across borders
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Introduction to Strategic Management

The New Competitive Landscape

The Global Economy

Competitive Implications

  • Managing supply and logistics (raw materials, components manufacturing, assembly, distribution)
  • Adaptation-standardization decisions in management practices and marketing programs
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Introduction to Strategic Management

The New Competitive Landscape

Technology and Technological Change

  • Increasing Rate of Change
  • Increasing Rate of Diffusion

Competitive Implications

  • Impact of Technology Convergence.
  • Application of Nanotechnology.
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Introduction to Strategic Management

The New Competitive Landscape

Information Intensity

  • Declining costs
  • Increasing accessibility

Knowledge Intensity (Information, Intelligence, Expertise)

  • Increasing proportion of shareholder value
  • Strategic Flexibility, Capacity to Learn & Reorient
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Introduction to Strategic Management

The New Competitive Landscape

Information and Knowledge Intensity

Competitive Implications

  • Knowledge management systems (SAP)
  • Control versus flexibility (strategic alliances)
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Introduction to Strategic Management

Mission of Firm

Clearly articulate 3-5 year plan of firm


  • The industry(ies) it wishes to participate in
  • How it wishes to participate
    • Marketing mix (product, price, place, promotion
    • Customer “wants and needs” it will serve
    • Position it will hold in its chosen markets
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Introduction to Strategic Management

Mission is:

  • What is the ultimate accomplishment – goal for the firm?
  • Usually stated in the “eyes” of the customers and key stakeholders
  • “How” it is achieved (core competencies of the firm)
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Introduction to Strategic Management

Examples of Vision and Mission Statements

  • Vision: S C Johnson
  • Mission Statement: Proctor & Gamble
  • Dilbert’s Mission Statement Generator
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Introduction to Strategic Management

What leads to a formulating a new strategy?

  • New CEO
  • External intervention
  • Threat of change in
  • ownership
  • Performance gap
  • Strategic inflection point


for change





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Introduction to Strategic Management

Strategy: Levels and Dynamics

  • Corporate: general perspective towards growth and management of various business units, product lines, functional areas
  • Business: Strategic Business Units (SBUs), focus on improvement of competitive position of products and services
  • Functional: focus on marketing, R & D, etc. to achieve SBU and overall corporate objectives.
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Introduction to Strategic Management
  • Corporate goals and objectives include:
    • Profitability (net profits)
    • Growth (increase in total assets, etc.)
    • Utilization of resources (ROE or ROI)
    • Market leadership (market share)
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Introduction to Strategic Management

Intended Strategy

Deliberate Strategy

Realized Strategy

Unrealized Strategy

Emergent Strategy

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Introduction to Strategic Management

The Importance of Stakeholders

Capital Market Stakeholders - shareholders and major suppliers of firm’s capital

Product Market Stakeholders - primary customers, suppliers, host communities, and unions

Organizational Stakeholders - employees (managerial and non-managerial)

Societal Stakeholders - environmental and social responsibility organizations