Presentation on theme: "Figure 2.1: The Five Stages of Strategic Management"— Presentation transcript:
1 Figure 2.1: The Five Stages of Strategic Management Craft aStrategyto AchieveObjectivesand VisionSettingDevelop aStrategicVision(andMission)ImplementandExecuteRevise asNeededStage1Stage 2Stage 3Stage 4Stage 5Monitor,Evaluate,and Take CorrectiveActions
2 Stage 1: Strategic Vision PurposeStrategic Vision vs. Mission StatementImportanceCommunicating the Vision
3 Stage 2: Setting Objectives PurposeObjectives vs. GoalsStrategic vs. FinancialShort-term and Long-termBalanced ScorecardStrategic IntentImportance
4 Stage 3: Crafting a Strategy PurposeWhat is Strategy?5 Definitions of StrategyImportanceWhat to Look for?
5 Figure 1.1: Identifying a Company’s Strategy -- What to Look For Actions to strengthen bargaining positionActions to differentiateproductsActions to build resources & capabilitiesActions to lower costsPatternof ActionsThat DefineStrategyActions and approaches used in functional areasActions to alter geographic coverageActions to pursue new opportunities or defend against threatsActions to merge or acquire rival companiesActions to form strategic alliances and collaborative partnerships
7 Uniting the Strategy Making Effort Corporate-wideStrategicVisionCorporateLevelObjectivesCorporateLevelStrategyCorporate-LevelManagersBusiness-LevelFunctionalPlant Managers,Lower-LevelSupervisorsTwo-Way InfluenceTwo-Way InfluenceTwo-Way InfluenceBusinessLevel StrategicVisionBusinessLevelObjectivesBusinessLevelStrategiesTwo-Way InfluenceTwo-Way InfluenceTwo-Way InfluenceFunctionalMissionsFunctionalObjectivesFunctionalStrategiesTwo-Way InfluenceTwo-Way InfluenceTwo-Way InfluenceOperatingMissionsOperatingObjectivesOperatingStrategies
8 What is a Strategic Plan? Where firm is headed -- Strategic vision and business missionShort and long term performance targets -- Strategic and financial objectivesAction approaches to achieve targeted results -- A comprehensive strategy
9 3 Tests of a Winning Strategy Goodness of Fit TestHow well is strategy matched to a firm’s internal and external situation?Competitive Advantage TestDoes the strategy lead to a sustainable competitive advantage?Performance TestDoes strategy boost firm performance?
10 Stage 4: Strategy Implementation Creating FITSInternal FitsPeople, competences, structure, policies/SOPs, best practices, support systems, rewards system, culture, budgets, and leadership.ExternalIndustry and macroenvironment.
11 Figure 10.1: The Eight Components of Strategy Execution Building aCapableOrganizationAllocating ResourcesEstablishing Strategy-Supportive PoliciesInstituting BestPractices forContinuousImprovementInstalling SupportSystemsTying Rewardsto Achievementof Key Strategic TargetsExercising StrategicLeadershipShaping CorporateCulture to Fit StrategyStrategy Implementer’s Action Agenda
12 Figure 2.1: The Five Stages of Strategic Management Craft aStrategyto AchieveObjectivesand VisionSettingDevelop aStrategicVision(andMission)ImplementandExecuteRevise asNeededStage1Stage 2Stage 3Stage 4Stage 5Monitor,Evaluate,and Take CorrectiveActions
13 Business Model versus Strategy Role of the Board of Directors Other Strategy IssuesBusiness Model versus StrategyRole of the Board of DirectorsLinking Strategy with Ethics and Corporate ResponsibilityWho Performs the 5 Tasks?