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If you dont have a strategy you will

be . . . part of somebody elses strategy.
- Alvin Toffler
RoyaltyFree/ Stockdisc/ Getty Images
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Why do some organizations succeed while
others fail?
Strategic Leadership
Task of most effectively managing a companys
strategy-making process
Strategy Formulation
Task of determining and selecting strategies
Strategy Implementation
Task of putting strategies into action to improve a
companys efficiency and effectiveness
Strategy is a set of related actions that managers take to increase
their companys performance.
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Competitive dvantage results
when a companys strategies lead to
superior performance compared to
competitors
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!uperior "erformance and
!ustainable Competitive dvantage
Superior Performance
One companys profitability relative to that of other
companies in the same or similar business or industry
a!imi"ing shareholder value is the ultimate goal of
profit making companies
#ompetitive $dvantage
%hen a companys profitability is greater than the average
of all other companies in the same industry & competing
for the same customers
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Sustained #ompetitive
$dvantage
When a companys strategies enable it to
maintain above average profitability for
a number of years
#eterminants of !hareholder $alue
To increase shareholder value' managers must
pursue strategies that increase the profitability
of the company and gro( the profits)
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$ business model encompasses ho( the company (ill*
Companys %usiness &odel
anagements model of ho( strategy (ill allo( the
company to gain competitive advantage and achieve
superior profitability
Select its customers
+efine and differentiate its
product offerings
#reate value for its
customers
$c,uire and keep customers
Produce goods or services
Lo(er costs
+eliver those goods and
services to the market
Organi"e activities (ithin
the company
#onfigure its resources
$chieve and sustain a high
level of profitability
-ro( the business over time
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#ifferences in Industry
and Company "erformance
$ #ompanys Profitability and Profit
-ro(th are determined by t(o main
factors*
The overall performance
of its industry relative
to other industries
Its relative success in its
industry as compared to the
competitors
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What is !trategy?
$ #ompanys strategy consists of the
competitive moves and business
approaches that managers employ to
attract and please customers' compete
successfully' gro( the business' conduct
operations' and achieve targeted
ob.ectives/
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What is !trategy?
Strategy is the overall plan of a firm deploying
its resources to establish a favorable position
and compete successfully against its
competitors) It describes a frame(ork for
charting a course of action) It e!plicates an
approach for the company that builds its
strength and is a good fit (ith the firms
environment/
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!trategic management is defined as the
set of decisions and actions that results
in the formulation and implementation
of plans designed to achieve a
companys ob'ectives(
!trategic &anagement(
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companys strategy indicates the choices its
managers have made about ho( to attract and
please customers) ho( to respond to changing
mar*et conditions) ho( to compete successfully)
how to grow the business) ho( to manage each
functional capabilities) and how to achieve
performance targets(
!trategic &anagement(
+evels of !trategic &anagement
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!trategic &anagers
#orporate-Level anagers
Oversee the development of strategies for the (hole
organi"ation
The #0O is the principle general manager (ho consults
(ith other senior e!ecutives
1usiness-Level anagers
2esponsible for overall company' business unit' or
divisional performance
Functional-anagers
2esponsible for supervising a particular task or
operation 3e)g) marketing' operations' accounting'
human resources4
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#imensions of !trategic #ecisions
2e,uire Top - anagement +ecisions
2e,uire Large $mount of Firms 2esources
$ffect the firms Long 5 Term Prosperity
$re Future Oriented
6sually have ultifunctional #onse,uences
2e,uire considering the 0!ternal
0nvironment
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+evels of pproaches to !trategy
The +esign $pproach
The $nalytical $pproach
The Positioning $pproach
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,he #esign pproach -./012
$lfred #handler 5 Strategy follo(s Structure/
Then Strategy (ill enforce changes in structure
Strategy determines organi"ational tasks
Strategy determines specific environment
(ithin (hich organi"ation (ill operate
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,he nalytical pproach -./032
#orporate Level
1usiness Level
Functional Level
Institutional Level 30!ternal 2elationships4
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,he "ositioning pproach -./45s2
ichael Porter 5 7 Forces odel
Supplier po(er' 1uyer po(er' Threat from 8e(
0ntrants' Threats from Substitutes and Intense of
2ivalry)
9 Strategies odel
Overall #ost Leadership
+ifferentiation
Focus
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6oles of !trategies
Pro 5 $ctive 2ole
#reating #hange
#ompetitive $dvantage
2eactive 2ole
anaging and $dapting #hange
Improving Organi"ations Performance
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!trategic &anagement "rocess
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#ompany ission
0!ternal
0nvironment
Internal
0nvironment
Strategic $nalysis and #hoice
Long 5 Term
Ob.ectives
-eneric and -rand Strategies
Short 5 Term
Ob.ectives
Functional
Strategies
-uiding
Policies
2estructuring' 2evie( and 2efocus
Strategic #ontrol
7mergent and #eliberate !trategies
Source: Adapted from H. int!"erg and
A. c#ugh$ dministrative !cience
8uarterly) %ol. &'. (o. )$ *une +,-..
2
%alanced !corecard
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Financial Value
Objectives, Targets,
Measures, Initiatives
Learning & Growth
Objectives, Targets,
Measures, Initiatives
Strategy
Operations
Objectives, Targets,
Measures, Initiatives
usto!er
Objectives, Targets,
Measures, Initiatives
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,he essence of strategy lies in creating
tomorrows competitive advantage faster than
competitors mimic the ones you possess
today.
9 #ary Hamel / 0. 1. 2rahalad