>> Strategic Management Defined: Strategic management is the art, science and craft of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives. Strategic management seeks to coordinate and integrate the activities of the various functional areas of a business in order to achieve long-term organizational objectives The Mission: A company’s mission describes what the company does. For example, the mission of Kodak is to provide “customers with the solutions they need to capture, store, process, output, and communicate images—anywhere, anytime.” Vision: The vision of a company lays out some desired future state; it articulates, often in bold terms, what the company would like to achieve. Nokia, the world’s largest manufacturer of mobile (wireless) phones, has been operating with a very simple but powerful vision for some time: “If it can go mobile, it will!” This vision implied that not only would voice technology go mobile but also a host of other services based on data. Values: The values of a company state how managers and employees should conduct themselves, how they should do business, and what kind of organization they

should build to help a company achieve its mission >>Strategic Management Process Strategy formulation – -Concurrent with this assessment, objectives are set. These objectives should be parallel to a timeline; some are in the short-term and others on the long-term. -Performing a situation analysis, self-evaluation and competitor analysis: both internal and external; both micro-environmental and macro-environmental. -These objectives should, in the light of the situation analysis, suggest a strategic plan. The plan provides the details of how to achieve these objectives. Strategy Implementation -Assigning responsibility of specific tasks or processes to specific individuals or groups -Allocation and management of sufficient resources (financial, personnel, time, technology support) Establishing a chain of command or some alternative structure (such as cross functional teams) -When implementing specific programs, this involves acquiring the requisite resources, developing the process, training, process testing, documentation, and integration with (and/or conversion from) legacy processes -It also involves managing the process. This includes monitoring results, comparing

to benchmarks and best practices, evaluating the efficacy and efficiency of the process, controlling for variances, and making adjustments to the process as necessary. Strategy Evaluation -Measuring the effectiveness of the organizational strategy, it's extremely important to conduct a SWOT analysis to figure out the strengths, weaknesses, opportunities and threats (both internal and external) of the entity in question. -In corporate strategy, Johnson and Scholes present a model in which strategic options are evaluated against three key success criteria: -Suitability (would it work?) -Feasibility (can it be made to work?) -Acceptability (will they work it?) >>Competition and competitive advantage -Competition is a rough and-tumble process in which only the most efficient and effective companies win out. It is a race without end. To maximize shareholder value, managers must formulate and implement strategies that enable their companies to outperform rivals and give them a competitive advantage. -A company has a sustained competitive advantage when its strategies enable it to maintain above-average profitability for a number of years.

Competition and competitive advantage -If a company has a sustained competitive advantage, it is likely to gain market share from its rivals and thus grow its profits more rapidly than those of rivals. In turn, competitive advantage will also lead to higher profit growth than that shown by rivals. -The key to understanding competitive advantage is appreciating how the different strategies managers pursue over time can create activities that fit together to -make a company unique or different from its rivals and able to consistently outperform them. -Superior Performance & Competitive Advantage: -the source of competitive advantage is found firstly in the ability of the organization to differentiate itself from its competitors and secondly by operating at a lower cost and hence at greater profit. -Therefore, the superior performances and competitive advantage are located at value advantage and productivity advantage >>Types of strategies Strategies can be divided into four main categories: 1. Functional-level strategies are directed at improving the effectiveness of operations within a company, such as manufacturing, marketing, materials management, product development, and customer service. 2. Business-level strategies

encompass the business’s overall competitive theme, the way it positions itself in the marketplace to gain a competitive advantage, and the different positioning strategies that can be used in different industry settings, for example, cost leadership, differentiation, focusing on a particular niche or segment of the industry, or some combination of these. 3. Global strategies address how to expand operations outside the home country to grow and prosper in a world where competitive advantage is determined at a global level. 4. Corporate-level strategies answer the primary questions: What business or businesses should we be in to maximize the long-run profitability and profit growth of the organization. How should we enter and increase our presence in these businesses to gain a competitive advantage >>Business Model: A business model is a kind of mental model, or gestalt, of how the various strategies and capital investments made by a company should fit together to generate above-average profitability and profit growth. A business model encompasses the totality of how a company will • Select its customers. • Create value for its customers. • Configure its resources. • Produce goods or services.

• Define and differentiate its product offerings. • Deliver those goods and services to the market. • Acquire and keep customers. • Organize activities within the company. • Lower costs. • Achieve and sustain a high level of profitability. • Grow the business over time. >> A Model of the Strategic Planning Process The formal strategic planning process has five main steps: 1. Select the corporate mission and major corporate goals. 2. Analyze the organization’s external competitive environment to identify opportunities and threats. 3. Analyze the organization’s internal operating environment to identify the organization’s strengths and weaknesses. 4. Select strategies that build on the organization’s strengths and correct its weaknesses in order to take advantage of external opportunities and counter external threats. 5. Implement the strategies. >> Strategic Leadership and Decision making • Strategic leadership refers to a manager’s ability to articulate a strategic vision for the company, or part of the company, and to motivate subordinates and develop a high performing organization >>Some major characteristics of a good strategic leader

that do lead to high performance -Vision, eloquence and consistency: strong leaders seem to have a vision of where the organization should go, are eloquent enough to communicate -Commitment: Strong leaders demonstrate their commitment to their vision by action and works, and they often lead by example -Being well informed: Effective strategic leaders develop a network of formal and informal sources who keep them well informed about what is going on within their company -Willingness to delegate and empower: High performance leaders are skilled at effective delegation to avoid being overloaded with responsibilities. They also recognize it as a tool of motivation - The astute use of Power: three ways of using astute power-i) strategic leaders must play the power game with skill and attempt to build consensus for their ideas rather than use of their authority to force, ii) should not commit themselves publicly to detailed strategic plans or precise objectives since unexpected contingencies require adaptation and iii) effective leaders must possess the ability to push through programs in a piecemeal fashion. -Emotional intelligence: a strong leader must have the

following psychological makeup/ characteristics - Self-awareness -Self-regulation -Motivation -Empathy -Social skills >>Cognitive biases and strategic management -When we make decisions, we tend to fall back n certain rules of thumb, or heuristics, that help us to make sense out of a complex and uncertain world. However, they lead to severe and systematic errors in the decision making process. They seem to arise from a series of cognitive biases in the way that human decision makers process information and reach decisions. Due to cognitive biases many managers make poor strategic decisions >> A number of cognitive biases are as following -Prior hypothesis bias -Reasoning by analogy -Techniques for improving decision making -Devil’s advocacy -Escalating commitment -Biased representativeness -Dialectic inquiry