ch 01 ppt slides rev 1

8/8/2019 Ch 01 PPT Slides Rev 1

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Strategic Management:Creating Competitive Advantages


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Two Perspectives of Leadership

Romantic view

Leader is the key force in organizations success

External view of leadership Focus is on external factors that affect an organizations

success

Leaders can make a difference

Must be aware of opportunities and threats faced inexternal environment

Must have thorough understanding of the firms resources

and capabilities


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Strategic Management

Strategic management is the study of why some firms

outperform others

How to compete in order to create competitive advantagesin the marketplace

How to create competitive advantages in the market place

o Unique and valuable

o Difficult for competitors to copy or substitute


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Key Attributes

Key Attributes of strategic management:

Directs the organization toward overall goals and objectives

Includes multiple stakeholders in decision making Needs to incorporate short-term and long-term perspectives

Recognizes trade-offs between efficiency and effectiveness


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Strategic Management Process

Adapted from Exhibit 1.2 Realized Strategy and Intended Strategy: Usually Not the Same

Source: H. Mintzberg and J. A. Waters, Of Strategies, Deliberate and Emergent, Strategic Management Journal 6(1985), pp. 257-

72.


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Strategic Analysis

Starting point in the

strategic management

process Precedes effective

formulation and

implementation of

strategies


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Strategic Analysis (cont.)

Clear goals and objectives permit effective allocationof resources

Hierarchy of goals- Vision

- Mission

- Strategic objectives

Analyzing external environments- Managers must scan the environment and analyze

competitors

- General environment

- Industry environment


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Frameworks for analyzing a firms internal

environment

- Strengths- Weaknesses

Analyzing strengths can uncover potential sources of

competitive advantage


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Intellectual assets are drivers of

- Competitive advantage

- Wealth creationNetworks and relationships among

- Employees

- Customers

- Suppliers- Alliance partners


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Strategy Formulation

Business level strategy:

- Successful firms develop bases for competitive

advantage Cost leadership

Differentiation

Focusing on narrow or industry-wide market segments

- Sustainability

- Industry life cycle


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Strategy Formulation (cont.)

Corporate-level strategy addresses:

Firms portfolio or group of businesses

- What business(es) should we be in?- How can we create synergies among the businesses?

Diversification

- Related

- Unrelated


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Strategy Formulation (cont.)

International Strategy

- Appropriate entry strategies for foreign markets

- Sustain competitive advantage in global markets Effective strategies for entrepreneurial initiatives


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Strategy Implementation

Informational control

- Monitor and scan the environment

- Respond effectively to threats and opportunities Behavioral control

Effective corporate governance

- Interests of managers and owners of the firm

Organizational structure and design


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Strategy Implementation (cont.)

Organizational boundaries

- Flexible

- Permeable Strategic Alliances

Develop organization that is committed to

- Excellence

- Ethical behavior


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Strategy Implementation (cont.)

Learning organization responsive to

- Rapid and unpredictable change

Corporate entrepreneurship and innovation- New opportunities

- Enhance innovative capacity

- Autonomous entrepreneurial behavior

- Product champions


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Corporate Governance and Stakeholder

Management

Corporate governance: the relationship among various

participants in determining the direction and

performance of corporations- Shareholders

- Management (led by the CEO)

- Board of Directors


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Corporate Governance and Stakeholder

Management (cont.)

Board of Directors

- Elected representatives of the

owners

- Ensure interests and motives of

management are aligned with

those of the owners

Effective and engaged Board of

Directors

Shareholder activism

Proper managerial rewards and

incentives


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Stakeholder Management

Two views of stakeholder management

- Zero sum

Stakeholders compete for attention and resources of the

organization

Gain of one is a loss to the other

- Symbiosis

Stakeholders are dependent upon each other

Mutual benefits


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Social Responsibility

Social responsibility: the expectation that businesses

or individuals will strive to improve the overall

welfare of society Managers must take active steps to make society better

Socially responsible behavior changes over time

Triple bottom line


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Example: Social Responsibility

Starbucks Coffee Company Corporate social responsibility is embedded throughout the

organization. The following are some of the commitments they have

made to be socially responsible:

Commitment to origins

Helping protect the environment

Starbucks in your community

Commitment to partners

Source: www.starbucks.com


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Strategic Management Perspective

Integrative view of the organization

Assess how functional areas and activities fit

together to achieve goals and objectives

All managers and employees must take and

integrative, strategic perspective of issues facing the

organization


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Coherence in Strategic Direction

Company vision

- Massively inspiring

- Overarching- Long-term

- Driven by and evokes

passion

- Fundamental statement ofthe organizations

Values

Aspiration

Goals

Hierarchy of Goals

Company visionCompany vision


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Mission statements

- Purpose of the company

- Basis of competition andcompetitive advantages

- More specific than vision

- Focused on the means by

which the firm willcompete Hierarchy of Goals


Mission statementsMission statements


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Strategic objectives

- Operationalize the mission

statement- Provide guidance on how

the organization can fulfill

or move toward the higher

goals

- More specific

- Cover a more well-defined

time frame

Hierarchy of Goals



Strategic objectivesStrategic objectives


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Strategic objectives

- Measurable

- Specific- Appropriate

- Realistic

- Timely

- Challenging- Resolve conflicts that arise

- Yardstick for rewards and

incentives

Hierarchy of Goals



Strategic objectivesStrategic objectives

ch 01 ppt slides rev 1

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