power point slides - overview
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Teacher Development Course on Successful Strategic Management
Dr. Theresa LauAssociate Professor
Hong Kong Polytechnic University
Dr. K.F. ChanAssociate Professor
Hong Kong Polytechnic University
November 2004
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Strategic Management
Strategic Management
The set of managerial decisions and actions that determines the long-run performance of a corporation
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What is Strategy
Strategy is a pattern in a stream of decisions or actions – H. Mintzberg It is a plan: intended course of action It is a pattern: a stream of actions It is a position: a product/market domain;
related to environment It is a perspective: a concept; a shared
ideology; driving force; the heart beat It is a ploy: a specific manoeuvre to outbeat a
competitor
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Deliberate and Emergent Strategies
Intended Strategy
RealizedStrategy
Unrealized
Strategy
Emergent Strategy
Deliberate Strategy
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Three Key Strategic Questions
Where is the organization now?If no changes are made, where will the
organization be in one, two, five or ten years? Are the answers acceptable?
If the answers are not acceptable, what specific actions should management undertake? What are the risks and payoffs involved?
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Benefits of Strategic ManagementClearer sense of strategic visionSharper focus on what is
strategically importantBetter coordination, communication
and staff commitmentBusinesses with strategic
management are more effectivePositive relationship between
strategy and financial performance
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Basic Elements of the StrategicManagement Process
Evaluation and
Control
Strategy Implementation
Environmental Scanning
Strategy Formulation
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Involves thinking strategically about Firm’s future business plans Where to “go”
Tasks include Providing long-term direction Giving firm a strong identity
Developing a Strategic Vision
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Missions vs. Strategic Visions
A mission statement focuses on current business activities -- “who we are and what we do” Current product and
service offerings Customer needs being
served Technological and
business capabilities
A strategic vision concerns a firm’s future business path -- “where we are going” Markets to be pursued Future technology-
product-customer focus Kind of company that
management is trying to create
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Environmental Scanning
Defined:
The monitoring, evaluating, and disseminating of information from the external and internal environments to key people within the firm.
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Environmental Scanning
Identify strategic factors SWOT Analysis
• Strengths, Weaknesses • Opportunities, Threats
Internal EnvironmentStrengths & Weaknesses
• Within the organization but not subject to short-run control of management
External EnvironmentOpportunities & Threats
• External to the organization but not subject to short-run control of management
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Environment Scanning
Industry Analysis
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The Value Chain
Adapted from Exhibit 3.1 The Value Chain: Primary and Support Activities
Source: Adapted with permission of The Free Press, a division of Simon & Schuster, Inc., from Competitive Advantage: Creating and Sustaining Superior Performance by Michael E. Porter.
General administration
Human resource management
Technology development
Procurement
Inbound logistics
OperationsOutbound logistics
Marketing and sales
Service
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Strategy Formulation
Defined:
Development of long-range plans for the effective management of environmental opportunities and threats in light of corporate strengths and weaknesses.
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Hierarchy of Strategy
C orp ora teS tra teg y
B u s in ess(D ivison L eve l)S tra teg y
F u n c tion a l S tra teg y
S tra teg icB u s in ess
U n it
M an u fac tu rin g F in an ce M arke tin g R esearchan d
D eve lop m en t
H u m anR esou rces
S tra teg icB u s in ess
U n it
S tra teg icB u s in ess
U n it
C orp ora te H ead q u arte rs
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Corporate Strategy I
Corporation’s overall direction and the management of its business
– Key Issues:
Firm’s directional strategy Firm’s portfolio strategy
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Corporate Strategy II Directional Strategy
Growth Strategy
*Concentration growth *Vertical integration *Diversification
Stability Strategy
Retrenchment Strategy
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Corporate Strategy III
Portfolio Analysis
BCG (Boston Consulting Group) Matrix Product life cycle and funding
decisionsQuestion marksStarsCash cowsDogs
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BCG Matrix
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Business Strategy
Emphasizes improving the competitive position of a corporation’s products or units
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Porter’s Competitive Strategies
Generic Competitive Strategies: - Lower cost strategy . Design, produce, market more efficiently than competitors - Differentiation strategy . Unique and superior value in terms of product quality, features, service - Niche strategy
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Functional Strategy
Functional Strategy:
- The approach a functional area takes to achieve corporate and business unit objectives and strategies by maximizing resource productivity.
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Functional Strategy
Core competency:Something that a corporation can do
exceedingly well – a key strength
Distinctive competencies:When core competencies or core
capabilities are superior to those of the competition.
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Definition of Strategy Implementation
Strategy Implementation
The process of putting strategies and policies into action
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Strategy Implementation
Implementation Process Questions:
Who are the people to carry out the strategic plan?
What must be done to align operations with new direction?
How is work going to be coordinated?
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The Seven S FrameworkThe Seven S Framework
SuperordinateGoals
Structure
Staff
Systems
StyleSkills
Strategy
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Definition of Evaluation and Control
Evaluation and Control
The process of monitoring corporate activities and performance results so that actual performance can be compared with desired performance