1. CHAPTER 1 Basic Concepts of Strategic Management
STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
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2. Globalization Electronic Commerce
Basic Concepts of Strategic Management
Globalization
Internationalization of markets and corporations
Global (worldwide) markets rather than national markets
Electronic Commerce
Use of the Internet to conduct business transactions
Basis for competition on a more strategic level rather than traditional focus on product features and costs
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3. Electronic Commerce -- Trends Forcing company transformation
Basic Concepts of Strategic Management
Electronic Commerce -- Trends
Forcing company transformation
Market access & branding changing – disintermediation of traditional distribution channels
Balance of power shift to consumer
Competition changing
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4. Electronic Commerce -- Trends Pace of business increasing
Basic Concepts of Strategic Management
Electronic Commerce -- Trends
Pace of business increasing
Internet purchasing beyond traditional boundaries
Knowledge key asset – source of competitive advantage
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5. Strategic Management Defined
Set of managerial decisions and actions that determines the long-run performance of a firm.
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6. 4 Phases of Strategic Management Basic financial planning
Basic Concepts of Strategic Management
4 Phases of Strategic Management
Basic financial planning
Forecast-based planning
Externally-oriented planning
Strategic management
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7. Clearer sense of strategic vision
Basic Concepts of Strategic Management
Highly Rated Benefits
Clearer sense of strategic vision
Sharper focus on strategic importance
Improved understanding of changing environment
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8. Not Always a Formal Process
Basic Concepts of Strategic Management
Not Always a Formal Process
Where is the organization now? (not where do we hope it is)
If no changes are made, where will the organization be in 1,2,5 or 10 years?
What specific actions should management undertake?
What are the risks and payoffs?
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9. Basic Elements of the Strategic Management Process
Basic Concepts of Strategic Management
Basic Elements of the Strategic Management Process
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10. Environmental Scanning Defined
Monitoring, evaluation, and disseminating information from external and internal environments –to key people in the firm
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11. Environmental Variables
Basic Concepts of Strategic Management
Environmental Variables
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12. Strengths – Weaknesses Opportunities - Threats
Environmental Scanning
SWOT Analysis
Strengths – Weaknesses
Opportunities - Threats
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13. 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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14. Purpose/reason for organization Promotes shared expectations
Strategy Formulation
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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15. Organization “fit” with environment Theory of population ecology
Organizational Adaptation
Organization “fit” with environment
Theory of population ecology
Institution theory
Strategic choice perspective
Organizational learning theory
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16. Strategic flexibility
Organizational Adaptation
Strategic flexibility
Demands long-term commitment to development of critical resources
Demands firm become a learning organization
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17. Learning Organizations
An organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights
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18. Systematic problem solving New approach experimentation
Learning Organizations
4 Chief Activities
Systematic problem solving
New approach experimentation
Learning from experiences
Intra-organization knowledge transfer
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19. Hierarchy of Strategy Basic Concepts of Strategic Management
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20. Corporate Goals/Objectives
Profitability (net profit)
Growth
Resource utilization (ROE, ROI)
Market leadership
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21. 3 Types of Strategy Corporate strategy Business strategy
Basic Concepts of Strategic Management
3 Types of Strategy
Corporate strategy
Business strategy
Functional strategy
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22. Corporate Strategy Stability Growth Retrenchment
Basic Concepts of Strategic Management
Corporate Strategy
Stability
Growth
Retrenchment
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23. Business Strategy Competitive strategies Cooperative strategies
Basic Concepts of Strategic Management
Business Strategy
Competitive strategies
Cooperative strategies
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24. Functional Strategy Technological leadership
Basic Concepts of Strategic Management
Functional Strategy
Technological leadership
Technological followership
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25. Strategic Decision-Making Process
Basic Concepts of Strategic Management
Strategic Decision-Making Process
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26. Strategic Decisions Rare Consequential Directive
Strategic Decision Making
Strategic Decisions
Rare
Consequential
Directive
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27. Mintzberg’s Modes Entrepreneurial mode Adaptive mode Planning mode
Strategic Decision Making
Mintzberg’s Modes
Entrepreneurial mode
Adaptive mode
Planning mode
Logical incrementalism
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28. 5 Elements of Good Strategy
Hambrick and Fredrickson – Good Strategy
5 Elements of Good Strategy
Arenas
Vehicles
Differentiators
Staging
Economic logic
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