gep asm session 1[1]

8/2/2019 Gep Asm Session 1[1]

1/23

Advanced St ra t eg i cM anagem en t

Prof Xiaobo WU

School of ManagementZhejiang [email protected]

2010-2-25 [email protected] 2

Without a strategy the

organization is like a ship without

a rudder, going around in circles.

Joel Ross and Michael Kami

Quote


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3

We may know that there are five essentials for

victory:

He will win who knows when to fight and when not to fight.

He will win who knows how to handle both superior andinterior forces

He will win who knows whose army is animated by the samespirit throughout all its ranks.

He will win who, prepared himself, waits to take the enemyunprepared.

He will win who has military capability and is not interferedwith by the sovereign.

----Sun Wu (The art of w ar)

The tradit ional thinking in China


Cheshire Puss, she [Alice] began... would you please tell me which wayI ought to go from here?That depends on where you want to get to, said the cat.

Lewis Carroll

How can you lead if you dont know where you are going?George Newman

The Conference Board

My job is to make sure the company has a strategy and that everybodyfollows it.

Kenneth H. OlsenFormer CEO, Digital Equipment Corporation

A strategy is a commitment to undertake one set of actions rather thananother.

Sharon M. OsterProfessor, Yale University


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Course Schedule Overview

Session 1 The Nature of Strategic Management 8:30am 12:00pm, February 25

Session 2 Vision & Mission Statements 1:30pm 4:30pm, February 25

Session 3 The External Environment 8:30am 12:00pm, March 4

Session 4 The Internal Environment 1:30pm 4:30pm, March 4

Session 5 Business-Level Strategy 8:30am 12:00pm, March 10

Session 6 Corporate-Level Strategy 8:30am 12:00pm, March 18

Session 7 Strategy Analysis & Choice 8:30am 12:00pm, March 25

Session 8 Strategy Implementation 8:30am 12:00pm, April 1

Session 9 Strategy Review, Evaluation, & Control 8:30am 12:00pm, April 8

Session 10 Final Presentation & Course Conclusion 8:30am 12:00pm, April 15

Final Exam 8:30am 12:00pm, April 22


Grading and Assessment Cri t eria

Presentation and report 40 Good collaboration among team members

Thorough and in-depth analysis

Clear, concise and convincing writing style (report)

Presentation skills (presentation)

Class participation 10 Presence in classes

Listening to the comments of others

Active in expressing constructive opinions in discussion

Final examination 50 Clear, concise and convincing writing style

Right understanding of concepts

Thorough and in-depth analysis of related questions, deploying relatedtheory



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Let s know each other

Where are you from?

Why you are here?

What would you do in 2020?

Suggested Readings

Books

M. A. Hitt, R. D. Ireland, and R. E. Hoskisson. Strategic Management:Competitiveness and Globalization, Concepts and Cases(8th Edition).South-Western College Pub. 2008

A. A. Thompson and A. J. Strickland. Strategic Management:

Concepts and Cases(12th Edition). The McGraw-Hill Companies, Inc.2008

D. Besanko, D. Remove, M. Shanley, and S. Schaefer. Economics ofStrategy(5th Edition). John Wiley & Sons, Inc. 2009

H. Mintzberg. Strategy Safari: The Complete Guide Through theWilds of Strategic Management(2nd Revised Edition). FT Press.2008



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Suggested Readings

M. E. Porter. Competitive Strategy: Techniques for AnalyzingIndustries and Competitors. Free Press. 1998

M. E. Porter. Competitive Advantage: Creating and SustainingSuperior Performance. Free Press. 1998

M. E. Porter. The Competitive Advantage of Nations. Free Press.1998

R. Burgelman, C. Christensen, and S. Wheelwright. StrategicManagement of Technology and Innovation(5th Edition). McGraw-Hill/Irwin. 2008

G. Hamel, C. K. Prahalad, H. Thomas, and D. ONeal. StrategicFlexibility: Managing in a Turbulent Environment. Wiley. 1999

A. Campbell and K. S. Luchs. Strategic Synergy(2nd Edition). IntlThomson Business Press. 1998


Suggested Readings

Journals

Harvard Business Review

Strategic Management Journal

Sloan Management Review

California Management Review

Management Science

Journal of Management

Academy of Management Journal

RAND Journal of Economics

McKinsey Quarterly



6/23

THE NATURE OF STRATEGI CMANAGEMENT

Session 1


What is Strategic Management?

The Strategic-Management Model

Stages of Strategic Management

Key Terms in Strategic Management

Benefits of Strategic Management

Guidelines for Effective Strategic Management


Outline


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The Evolution Of Strategic Management

1950s

Term strategic planning originates

1960s 1970s

Strategic planning very popular

Widely viewed as panacea for problems

1980s

Strategic planning cast aside

Planning models did not yield higher returns

1990s2000

Revival of strategic planning

Widely practiced in business world

Michael Poter s Talk



8/23

What is St rat egic Management ?

Definition of strategic management

Strategic management can be defined as the art andscience of formulating, implementing, and evaluatingcross-functional decisions that enable an organizationto achieve its objectives.

The purpose of strategic management

The purpose of strategic management is to exploit

and create new and different opportunities fortomorrow; long-range planning, in contrast, tries tooptimize for tomorrow the trends of today.


What is St rat egic Management ?

Integrating intuition and analysis indecision making

The strategic-management can be describedas an objective, logical, systematic approach

for making major decisions in an organization.

Yet intuitionis essential for making goodstrategic decisions, particularly for makingdecisions in situations of great uncertainty orlittle precedent.



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The Nature Of Strategic Management

Art and science of formulating, implementing,

and evaluating cross-functional decisions that

enable an organization to achieve its objectives..

As this definition implies, SM focuses on

integrating management, marketing,

finance/accounting, production/operations,research and development, and computerinformation systems to:

achieve organizational success.

A Local Case

The strategy of a private company inHangzhou, China



10/23

The St rat egic-Management Model

A Comprehensive Strategic-Management Model

The framework is a widely accepted, comprehensivemodel of the strategic-management process.

The strategic-management process is dynamic andcontinuous.

The strategic-management process is not as cleanlydivided and neatly performed in practice as the

strategic-management model suggests.

Involvement and commitment from mangers andemployees is essential to successful strategic-management.


A Comprehensive Strategic-Management Model


DevelopVision and

MissionStatement(Session 2)

EstablishLong-Term

Objectives

(Session 5, 6)

Generate,Evaluate,

and SelectStrategies(Session 7)

ImplementStrategies

(Session 8)

Measureand Evaluate

Performance

(Session 9)

PerformExternalAudit

(Session 3)

PerformInternalAudit

(Session 4)

StrategyFormulation

StrategyImplementation

StrategyEvaluation


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Stages of St rategic Management

The process consists of three stages

Strategy formulation

Strategy formulation includes developing a visionand mission, identifying an organizations externalopportunities and threats, determining internalstrengths and weaknesses, establishing long-termobjectives, generating alternative strategies, and

choosingparticular strategiesto pursue


StrategyFormulation


StrategyEvaluation


Strategy implementation

Strategy implementation requires a firm establishannual objectives, devisepolicies, motivateemployees, and allocate resourcesso thatformulated strategies can be executed.

Implementing strategy means mobilizingemployees and managers to put formulatedstrategies into action. Successful strategyimplementation hinges upon managers ability tomotivate employees, which is more an art than ascience.


StrategyFormulation


StrategyEvaluation


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Strategy evaluation

Strategy evaluation is the final stage in strategicmanagement.

Three fundamental strategy-evaluation activities

reviewing external and internal factors that are the basesfor current strategies

measuring performance

taking corrective actions


StrategyFormulation


StrategyEvaluation

Adapt ing to Change

The only constant is change

In todays business environment, more than in anypreceding era, the only constant is change.

E-commerce

Globalization

Economic recession Merger mania

Manage change

Successful organizations effectively manage change.The strategists should continually monitor internaland external events and trends so that timelychanges can be made as needed.



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The emphasis of st rat egic management

The emphasis of strategic management should beput on the four basic, educational themes. First, the tasks of general management in leading the

overall enterprise, in contrast to the tasks of a specialistmanager

Second, the strategic management as a key functionand responsibility of the line general manager, not as astaff planning activity.

Third, the general managers ability to manage the

process by which an organization both formulates andimplements its strategy.

Finally, the responsibility of a general manager tomultiple constituencies with conflicting needs and goals,and the management of that organization so as toachieve both economic and social-ethical goals.

The Five Tasks Of Strategic Management

1. Developing a strategic vision and businessmission

A well-conceived strategic vision prepares a companyfor the future, establishes long-term direction, and

indicates the companys intent to stake out a particularbusiness position.

2. Setting objectives.

Objectives are yardsticks for tracking an organizationsperformance and progress.

Companies need both financial objectives and strategicobjectives.


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The Five Tasks Of Strategic Management

3. Crafting a strategy to achieve the desiredresults. An organizations strategy consists of the actions and

business approaches

Good strategy-making is more outside-in than inside-out

A companys strategy is dynamic, emerging in bits andpieces

A companys strategy is both proactive (intended) andreactive (adaptive).

The Five Tasks Of St rat egic Management

4. Implementing and executing the chosen strategyefficiently and effectively.

5. Evaluating performance, reviewing new developments,

and initiating corrective adjustments in long-term direction.

A companys mission, objectives, strategy, and approachto implementation are never final; evaluating performance,reviewing changes in the surrounding environment, andmaking adjustments are normal and necessary parts of thestrategic management process.


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Who Perform s The Five Tasks Of St rat egic Management :St rat egic Decision Makers

Modes Of Strategy Formulation

Entrepreneurial Mode.

Strategy is made by one powerful individual. The focus is onopportunities. Problems are secondary.

Strategy is guided by the founders own vision of direction and isexemplified by large, bold decisions.

Adaptive Mode.

Sometimes referred to as muddling through, this strategy-formulationmode is characterized by reactive solutions to existing problems, rather

than a proactive search for new opportunities. Planning Mode.

Analysts assume major responsibilities for strategy-formulation.Strategic planning includes both the proactive search for newopportunities and the reactive solution of existing problems. Systematiccomprehensive analysis is used for the development of strategies.

Corporat e Board Directors Cont inuum :

The degree of involvement in strategic management (fromlow passive to high active) is as follows: Phantom:

Never knows what to do, if anything; no degree of involvement.

Rubber Stamp: Permits officers to make all decisions. It votes as the officers

recommend on action issues.Minimal Review: Formally reviews selected issues that officers bring toits attention.

Nominal Participation: Involved to a limited degree in the performance or review of selected

key decisions, indicators, or programs of management.

Active Participation: Approves, questions, and makes final decisions on mission, strategy,

policies, and objectives. Has active board committees. Performs fiscaland management audits.

Catalyst: Takes the leading role in establishing and modifying the mission,

objectives, strategy, and policies. It has a very active strategycommittee.


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Top Management (1/ 2)

Top Management, especially the CEO (chief

executive officer), is responsible to the board ofdirectors for the overall management of the

corporation. It is tasked with getting thingsaccomplished through and with others, in order tomeet the corporate objectives.

All top managers are people who see the businessas a whole, who can balance the present needs ofthe business against the needs of the future, andwho can make final and effective decisions.

Top Management (2/ 2)

The CEO must successfully handle three

responsibilities crucial to the effective strategic

management of the corporation:

1. fulfill ten interrelated key roles

2. provide executive leadership

3. initiate and manage strategic planning process


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Key Term s in St rat egic Management

Competitiveadvantage

Strategists

External opportunitiesand threats

Long-term objectives

Annual objectives

Sustained competitiveadvantage

Vision and mission

Internal strengths andweaknesses

Strategies

Polices



Competitive Advantage

Strategic management is all about gaining and

maintaining competitive advantage.

Competitive advantage can be defined as anything

that a firm does especially well compared to rival

firms. When a firm can do somethingthat rival firms

cannot do, or owns somethingthat rival firms desire,

that can represent a competitive advantage.



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Sustained Competitive Advantage

Normally, a firm can sustain a competitive advantagefor only a certain period due to rival firms imitatingand underminingthat advantage. Thus it is notadequate to simply obtain competitive advantage.

A firm must strive to achieve sustained competitiveadvantageby

(1) continually adapting to changesin external trends andevents and internal capabilities, competencies, and resources;

and by (2) effectively formulating, implementing, andevaluating strategies that capitalize upon those factors.



Strategists

Strategists are the individuals who are mostresponsible for the success or failureof anorganization.

Strategists have various job titles, such as chiefexecutive officer, president, owner, chair of the board,executive director, chancellor, dean, or entrepreneur.


Jak W elch Bill Gates Steve Paul Jobs LIU Chuanzhi REN Zhengfei


19/23


Vision and Mission Statements

Vision statement answers the question, What do wewant to become? Developing a vision statement isthe first step in strategic planning.

Mission statements are enduring statements ofpurpose that distinguish one business from othersimilar firms. A mission statement identifies the scopeof a firms operations in product and market terms.It answers the question: What is our business?



External Opportunities and Threats

External opportunities and external threats refer toeconomic, social, cultural, demographic,environmental, political, legal, governmental,technological, and competitive trends and events that

could significantly benefit or harman organization inthe future. They are largely beyond the control of asingle organization.

A basic tenet of strategic management is that firmsneed to formulate strategies to take advantage ofexternal opportunitiesand to avoid or reduce theexternal threats.



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Internal Strengths and Weaknesses

Internal strengths and internal weaknesses are an

organizations controllable activitiesthat are

performed especially well or poorly.

Organizations strive to pursue strategies that

capitalize internal strengths and eliminate internal

weaknesses.



Long-Term Objectives

Objectives can be defined as specific resultsthat an organization seeks to achieve inpursuing its basic mission.

Long-term means more than one year.

Strategies

Strategies are the meansby which long-termobjectives will be achieved.



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Annual Objectives

Annual objectives are short-term milestonesthat organizations must achieve to reachlong-term objectives.

Policies

Policies are the meansby which annualobjectives will be achieved.


Benefi t s of St rat egic Management

Control its own destiny

Strategic management allows an organization to bemore proactive than reactive in shaping its own future;it allows an organization to influence (rather than justrespond to) activitiesand thus to exert control overits own destiny.

Financial benefits

Organizations using strategic-management conceptsare generally more profitable and successful.



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Benefi t s of St rat egic Management

Other benefits

Enhanced awareness of external threats

Improved understanding of competitorsstrategies

Increased employee productivity

Reduced resistance to change

Clearer understanding of performance-rewardrelationships

?2010-2-25 [email protected] 43

Guidelines for Eff ect ive St rat egicManagement

Some fundamental guidelines

Change comes through implementation andevaluation, not through the plan.

Keep the strategic-management process as simpleand non-routineas possible.

Strategic management must be self-reflective learningprocess.

Effective strategic management is open-mindedness.

Most organizations can afford topurse only a fewcorporate-level strategiesat any given time.



23/23

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gep asm session 1[1]

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