2 If you don’t have a map, any route you take will get you where you are going. Peter Drucker If a man take no thought about what is distant, he will soon find sorrow near at hand. He who will not worry about what is far off will soon find something worse than worry.Confucius
3 Strategic Planning What is the strategic management process? External environment analysisInternal environment and strategic directionSWOT analysisFormulation, Implementation and Control
4 Strategic Management Process External and Internal Environmental AnalysisStrategic DirectionStrategy FormulationStrategy Implementation and ControlStrategic Restructuring
5 Strategy and Strategic Management Strategy and Competitive AdvantageStrategy is an action focus that links an organization to its environment
6 Strategy and Strategic Management The Strategic Management Processthe process of formulating and implementing strategies to advance an organization’s mission and objectives and secure competitive advantage
7 Strategy and Strategic Management The Strategic Management ProcessStrategy formulation (Drucker)What is our business mission?Who are our customers?What do our customers consider value?What have been our results?What is our plan?
8 Strategy and Strategic Management The Strategic Management ProcessStrategy implementationputting plans into action
9 Strategy and Strategic Management Analysis of Mission, Values, and ObjectivesMission statementdomaincustomersproducts and/or serviceslocationphilosophy
10 Strategy and Strategic Management Analysis of Mission, Values, and ObjectivesStrategic constituencies analysisassessment of how well the organization serves stakeholders
11 Strategy and Strategic Management Analysis of Mission, Values, and ObjectivesCore valuesbroad beliefs about what is/is not appropriateObjectivesdirect activities toward key and specific results
13 Strategy and Strategic Management Analysis of Organizational Resources and CapabilitiesSWOT analysisOrganizationalStrengthsWeaknessesEnvironmentalOpportunitiesThreats
14 Situation Analysis (SWOT) StrengthsWhat resources and capabilities do you possess that can lead to a competitive advantage for position and market share in the industry?
15 Situation Analysis (SWOT) WeaknessesWhat resources and capabilities do you not possess, but are necessary to compete for position and market share in the industry?
16 Situation Analysis (SWOT) OpportunitiesConditions in the external environment that that allow you to take advantage of your strengths, overcome your weaknesses or neutralize threats.
17 Situation Analysis (SWOT) ThreatsConditions in the external environment that may stand in the way of achieving corporate goals and objectives.
18 Strategies Used by Organizations Levels of Strategycorporatebusinessfunctional
19 Strategies Used by Organizations Types of Strategiesgrowthconcentrationdiversification
20 Strategies Used by Organizations Types of Strategiesretrenchment (defensive)turnarounddivestitureliquidation
21 Strategies Used by Organizations Types of Strategiesstabilitycombinationused by large and complex organizations
22 Strategy Formulation Opportunities for Competitive Advantage Cost and qualityKnowledge and timingBarriers to entryFinancial resources
23 Strategy Formulation Boston Consulting Group (BCG) Matrix ties strategy formulation to analysis of business opportunities according to market growth rate and market sharestarscash cowsquestion marksdogs
24 Strategy Formulation Portfolio Planning investing scarce organizational resources among competing business opportunities
25 Porter’s Five Competitive Forces New EntriesIndustry EnvironmentDirect CompetitionBuyersSuppliersSubstitutes
26 Competition The healthcare industry: Complex Highly competitive High tempo of changeExternal EnvironmentHighly demanding consumers, Government regulationNew entriesGroup practice, Ambulatory centers
27 Competition (con’t) Buyers Suppliers Substitutes Employers Health plansSuppliersPhysiciansSubstitutesGeneric RxAlternative health care
28 Strategy Formulation Porter’s Competitive Strategies Model new competitorsbargaining power of suppliersbargaining power of customersthreats of substitute products and servicescompetition between existing companies
29 Strategy Formulation Porter’s Competitive Strategies Model Strategies to Gain Competitive Advantagedifferentiationcost leadershipfocus
30 Business Strategy (Domain and Navigation) Low-Cost leadership (volume discounts)Differentiation (set apart from other competitors)Focused (a niche market combining differentiation and low-cost leadership)
31 Strategy Formulation Corporate Strategy (Domain) Specialization/niche Vertical integration (forward and backward)Horizontal integrationDiversificationRetrenchment or divestitureStrategic alliances (joint ventures, mergers and consolidations)
32 Strategy Formulation Product Life Cycles Stages introduction growth maturitydecline
33 Strategy Formulation Emergent Strategies Logical incrementalism develop progressively over timeLogical incrementalismstrategies that develop as modest adjustments to past patterns
34 Strategy Implementation Strategic Management FailuresSubstanceinadequate attention to major strategic planning elementsProcesspoor handling of strategy implementation
35 Strategy Implementation Leadership and Top Management Teamseffective strategy implementation depends on all managersCorporate Governanceboards of directorsinsideoutside
36 Strategy and Entrepreneurship Who are the Entrepreneurs?Risk-taking individuals who pursue opportunities that others do not see
37 Strategy and Entrepreneurship Typical Characteristics of Entrepreneursinternal locus of controlhigh energy levelhigh need for achievementtolerance for ambiguityself-confidenceaction oriented
38 Strategy and Entrepreneurship Entrepreneurship and Small BusinessSmall businessfewer than 500 employeesmost common type of business in the U.S.high failure rate
39 Strategy and Entrepreneurship Small Business DevelopmentSmall Business Administration (SBA)Small Business Development Centersoffer guidance on how to run a business successfully
40 Strategy and Entrepreneurship Entrepreneurship and Large Enterprisesintrapreneurshipentrepreneurial behavior within large organizationsskunk worksgroups of employees work in a creative setting