1. Abbasian, Phd. 2014 www.h-abbasian.com Ch 1 -1 Chapter 1 The Nature of Strategic Management Strategic Management: Concepts & Cases 13 th Edition Fred David

2. Ch 1 -2 Art & science of formulating, implementing, and evaluating, cross-functional decisions that enable an organization to achieve its objectives Strategic Management –Defined Abbasian, Phd. 2014 www.h-abbasian.com

3. Ch 1 -3 Purpose of Strategic Management To exploit and create new and different opportunities for tomorrow Abbasian, Phd. 2014 www.h-abbasian.com

4. Ch 1 -4 Strategic Management In essence, the strategic plan is a company’s game plan Abbasian, Phd. 2014 www.h-abbasian.com

5. Ch 1 -5 3 Stages of the Strategic Management Process Strategy formulation Strategy implementation Strategy evaluation Abbasian, Phd. 2014 www.h-abbasian.com

6. Ch 1 -6 Vision & Mission Strategy Formulation External Opportunities & Threats Internal Strengths & Weaknesses Long-Term Objectives Alternative Strategies Strategy Selection Abbasian, Phd. 2014 www.h-abbasian.com

7. Ch 1 -7 Issues in Strategy Formulation Businesses to enter Businesses to abandon Allocation of resources Expansion or diversification International markets Mergers or joint ventures Avoidance of hostile takeover Businesses to enter Businesses to abandon Allocation of resources Expansion or diversification International markets Mergers or joint ventures Avoidance of hostile takeover Abbasian, Phd. 2014 www.h-abbasian.com

8. Ch 1 -8 Strategy Implementation Annual Objectives Policies Employee Motivation Resource Allocation Abbasian, Phd. 2014 www.h-abbasian.com

9. Ch 1 -9 Strategy Implementation Steps Developing a strategy-supportive culture Creating an effective organizational structure Redirecting marketing efforts Preparing budgets Developing and utilizing information systems Linking employee compensation to organizational performance Abbasian, Phd. 2014 www.h-abbasian.com

10. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -10 Issues in Strategy Implementation Action Stage of Strategic Management Mobilization of employees & managers Most difficult stage Interpersonal skills critical Action Stage of Strategic Management Mobilization of employees & managers Most difficult stage Interpersonal skills critical

11. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -11 Strategy Evaluation Internal Review External Review Performance Measurement Corrective Action

12. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -12 Peter Drucker: Think through the overall mission of a business. Ask the key question: “What is our Business?” Prime Task of Strategic Management

13. Ch 1 -13 The strategic management process attempts to organize quantitative and qualitative information under conditions of uncertainty Integrating Intuition & Analysis Abbasian, Phd. 2014 www.h-abbasian.com

14. Ch 1 -14 Intuition is based on:  Past experiences  Judgment  Feelings Integrating Intuition & Analysis Intuition is useful for decision making in conditions of:  Great uncertainty  Little precedent  Highly interrelated variables  Several plausible alternatives Abbasian, Phd. 2014 www.h-abbasian.com

15. Ch 1 -15 Involve management at all levels Intuition & Judgment Influence all analyses Integrating Intuition & Analysis Abbasian, Phd. 2014 www.h-abbasian.com

16. Ch 1 -16 Organizations should continually monitor internal and external events and trends so that timely changes can be made as needed Adapting to Change Abbasian, Phd. 2014 www.h-abbasian.com

17. Ch 1 -17 Key Terms in Strategic Management Competitive advantage Strategists Vision and mission statements External opportunities and threats Internal strengths and weaknesses Long-term objectives Strategies Annual objectives Policies Abbasian, Phd. 2014 www.h-abbasian.com

18. Ch 1 -18 Anything that a firm does especially well compared to rival firms Strategic Management is Gaining and Maintaining Competitive Advantage Abbasian, Phd. 2014 www.h-abbasian.com

19. Ch 1 -19 1. Continually adapting to changes in external trends and events and internal capabilities, competencies, and resources Achieving Sustained Competitive Advantage 2. Effectively formulating, implementing, and evaluating strategies that capitalize on those factors Abbasian, Phd. 2014 www.h-abbasian.com

20. Ch 1 -20 Strategists Gather Information Analyze Information Organize Information Abbasian, Phd. 2014 www.h-abbasian.com

21. Ch 1 -21 Vision Statement – What do we want to become? Mission Statement – What is our business? Vision and Mission Statements Abbasian, Phd. 2014 www.h-abbasian.com

22. Ch 1 -22 External Opportunities and Threats Analysis of Trends  Economic  Social  Cultural  Demographic/Environmental  Political, Legal, Governmental  Technological  Competitors Abbasian, Phd. 2014 www.h-abbasian.com

23. Ch 1 -23 Basic Tenet of Strategic Management External Opportunities and Threats Strategy Formulation Take advantage of External Opportunities Take advantage of External Opportunities Avoid/minimize impact of External Threats Avoid/minimize impact of External Threats Abbasian, Phd. 2014 www.h-abbasian.com

24. Ch 1 -24  Controllable activities performed especially well or poorly  Determined relative to competitors Internal Strengths and Weaknesses Abbasian, Phd. 2014 www.h-abbasian.com

25. Ch 1 -25 Typically located in functional areas of the firm  Management  Marketing  Finance/Accounting  Production/Operations  Research & Development  Management Information Systems Internal Strengths and Weaknesses Abbasian, Phd. 2014 www.h-abbasian.com

26. Ch 1 -26 Assessing the Internal Environment Internal Strengths and Weaknesses Internal Factors Performance Measures Ratios Industry Averages Survey Data Abbasian, Phd. 2014 www.h-abbasian.com

27. Ch 1 -27  Specific results that an organization seeks to achieve in pursuing its basic mission  Long-term means more than one year Long-Term Objectives Abbasian, Phd. 2014 www.h-abbasian.com

28. Ch 1 -28 Long-Term Objectives Essential for ensuring the firm’s success  Provide direction  Aid in evaluation  Create synergy  Reveal priorities  Focus coordination  Provide basis for planning, organizing, motivating, and controlling Abbasian, Phd. 2014 www.h-abbasian.com

29. Ch 1 -29 Means by which long-term objectives are achieved Strategies Abbasian, Phd. 2014 www.h-abbasian.com

30. Ch 1 -30 Strategies Examples  Geographic expansion  Diversification  Acquisition  Product development  Market penetration  Retrenchment  Divestiture  Liquidation  Joint venture Abbasian, Phd. 2014 www.h-abbasian.com

31. Ch 1 -31 Short-term milestones that firms must achieve to reach long-term objectives Annual Objectives Abbasian, Phd. 2014 www.h-abbasian.com

32. Ch 1 -32 Means by which annual objectives will be achieved Policies Abbasian, Phd. 2014 www.h-abbasian.com

33. Ch 1 -33 Abbasian, Phd. 2014 www.h-abbasian.com

34. Ch 1 -34  Strategic Management Process  Dynamic & continuous  More formal in larger organizations Strategic Management Model Abbasian, Phd. 2014 www.h-abbasian.com

35. Ch 1 -35 Strategic Management Communication is a key to successful strategic management Abbasian, Phd. 2014 www.h-abbasian.com

36. Ch 1 -36 Benefits of Strategic Management Abbasian, Phd. 2014 www.h-abbasian.com

37. Ch 1 -37 Benefits of Strategic Management Nonfinancial Benefits  Enhanced awareness of threats  Improved understanding of competitors’ strategies  Increased employee productivity  Reduced resistance to change  Clearer understanding of performance-reward relationship  Enhanced problem-prevention capabilities Abbasian, Phd. 2014 www.h-abbasian.com

38. Ch 1 -38 Why Some Firms Do No Strategic Planning Lack of knowledge of strategic planning Poor reward structures Fire fighting Waste of time Too expensive Laziness Content with success Abbasian, Phd. 2014 www.h-abbasian.com

39. Ch 1 -39 Why Some Firms Do No Strategic Planning (continued) Fear of failure Overconfidence Prior bad experience Self-interest Fear of the unknown Honest difference of opinion Suspicion Abbasian, Phd. 2014 www.h-abbasian.com

40. Ch 1 -40 Comparing Business and Military Strategy Strategic planning started in the military Similarity  Both business and military organizations must adapt to change and constantly improve Difference  Business strategy assumes competition  Military strategy assumes conflict Abbasian, Phd. 2014 www.h-abbasian.com