Overview • Strategic management • Your own strategic direction • Tools for analyzing strategic direction • Determining strategic alternatives
What is strategic management? Strategic management is all about anticipating, driving, and capitalizing on change: • Anticipating: seeing the future • Driving: shaping the future • Capitalizing: making the most of the future
What is strategic management? • “If it ain’t broke... • Don’t fix it.” • “If it ain’t broke... • You haven’t looked hard enough. • Fix it anyway!” • Tom Peters • Thriving on Chaos
What is strategic management? In any strategic planning process, we must answer three key questions: • Where are we now? • Where are we going? • How will we get there?
Goal Gap Current Path TODAY The Performance Gap Outcome Time
How do we close the gap? • Define our current position .... • with respect to customer needs, competitors, the general market situation • Determine our goal .... • where should our firm be in 5, 10, …, years? • Evaluate our firm and our market …. • Strengths, Weaknesses, Opportunities, Threats • Start down the path that will lead to our goal • short - long-term action steps to move toward our target
What is strategy? • Operational effectiveness versus strategy • What is operational effectiveness?
What is strategy? • “Competitive strategy is about being different.” • “Strategy is the creation of a unique and valuable position in your industry.” • “Activities are the basic units of competitive advantage.” • “Strategy is about combining activities.” • “Strategy is about creating fit among a company’s activities.” • “Strategy is choosing what not to do.”
What is strategy? • Strategy is…. • Looking longer term • Capitalizing on change • A stream of decisions • Focused on a purpose • Managing strategic risks • Creating a unique and valuable position • Choosing what not to do
Assessing the Situation Vision Mission Strategy Implementation Goals Objectives Core Strategy Functional Strategies Market Conditions Customers Product Marketing Your Firm Volume Resources Competitors Purchasing Finance Organization Strengths Weaknesses People Social Opportunities Threats The Strategic Management Process Operations Management