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Learning Objectives
After studying this chapter, you should be able to do the following:
• Define the term strategic management (SM)
• Describe the SM process.
• Explain the need for integrating analysis and intuition in strategic
management.
• Explain the benefits of strategic management.
• Explain the impacts of Globalization and E-commerce on SM.
• Describe the theory of learning organization.
• Explain the basic model of SM.
• Discuss the basic model of SM: The nature of strategy formulation,
implementation, and evaluation activities.
• Describe the strategic decision making model.
• Discuss how a firm may achieve sustained competitive advantage.
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Strategic Management
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4 Phases in the Evolution of Strategic Management /4 Types
of Strategic Management
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Benefits of SM
Key Questions
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Benefits of SM
Why need Strategic Management?
7
Globalization & E-Commerce
Challenges to SM
• Impact of Globalization
– Internationalization of markets & corporations
– Markets: global than national markets
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Theories of Organizational
Adaptation
Population Ecology vs. Institutional Theory
(Can’t Change) (Mimic successful organizations)
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Creating Learning Organization (LO)
• LO is skilled at creating, acquiring and
transferring knowledge and modifying its
behavior to reflect new knowledge and
insight.
• Key Activities:
– Solve problems systematically
– Experiment with new approaches
– Learn from experience
– Transfer knowledge throughout the organization
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Basic Model of SM
• Four Basic Elements
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The term used in previous slide are explained here.
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1.Environmental Scanning
• Monitoring, evaluation, and disseminating
information from external and internal
environments –to key people in the firm
SWOT Analysis
• Strengths – Weaknesses
• Opportunities – Threats
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1. Environmental Scanning
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2. Strategy Formulation
• Development of long-
range plans for effective
management of
opportunities and threats
in light of corporate
strengths and weaknesses
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2.Strategy Formulation
Vision statement
• “Vision is the art of seeing things invisible”
Jonathan Swif
Mission Statement
• Purpose/reason for organization
• Promotes shared expectations
• Communicates public image
• Who we are; what we do; what we aspire to
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2.Strategy Formulation
Corporate Goals/Objectives flow from the Mission/Vision statement
• Specific
• Measurable
• Action oriented
• Realistic
• Timing is identified
SMART Goals
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2. Strategy Formulation
• Selecting Strategy / Hierarchy of Strategy
– Corporate strategy (Stability, Growth,
Retrenchment)
– Business strategy (Competitive,
Cooperative)
– Functional strategy (Technological
Leadership, Technological Followership)
• Defining Policies
– Guidelines for decision making that links
formulation to implementation
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3. Strategy Implementation
Programs
Strategy
Implementation Budgets
Procedures
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3. Strategy Implementation
• Programs – single use plans (projects)
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4.Evaluation and Control
Feedback/Learning Process
• Must go back to revise or correct decisions
made earlier.
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Triggering Events
• New CEO
• External Intervention
• Threat of change in ownership
• Performance Gap
• Strategic inflection point (industry)
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Strategic Decisions
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Strategic Decision Making Model
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Strategic Decision Making
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Elements of Good Strategy
1. Arenas – Where?
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Key Reference
• Chapter 01-J David Hunger and Thomas L
Wheelan, Strategic Management and Business
Policy (10th Edition), Addison Wesley Lingman
Inc.
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Thank You
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