Strategic Management Revision Prof.Dr. E.Vatchkova

Strategic Management Primarily concerned with how organizations and managers can make appropriate decisions to ensure the long term survival and success of the organization, in condition of substantial complexity and uncertainty Primarily concerned with how organizations and managers can make appropriate decisions to ensure the long term survival and success of the organization, in condition of substantial complexity and uncertainty

Three main aspects STRATEGY ITSELF STRATEGY ITSELF EXCELLENCE IN THE IMPLEMENTATION FOR EFFRECTIVE PERFORMANCE EXCELLENCE IN THE IMPLEMENTATION FOR EFFRECTIVE PERFORMANCE INNOVATION – TO RESPOND TO PRESSURES FOR CHANCE INNOVATION – TO RESPOND TO PRESSURES FOR CHANCE

ACOUNSTABLE (1980) management processes and decisions which deteAAAAAArmine the long-term structure and activities of the organization management processes and decisions which deteAAAAAArmine the long-term structure and activities of the organization  Management process  Management decision  Time scale  Structure

ANSOFF (1987) Strategic management involves: Strategic management involves:  Strategic planning  Management capability plan  The overall process of strategic change

Analyzing the environment (powerful contextual dimension) Six environmental domains:economic, political, social, technological, competitive, physical Six environmental domains:economic, political, social, technological, competitive, physical Six environmental dimensions: munificence, dynamism, complexity, concentration, turbulence, consensus Six environmental dimensions: munificence, dynamism, complexity, concentration, turbulence, consensus Adapting: buffering, smoothing, forecasting, rationing, boundary spanning, structural complexity, managerial succession Adapting: buffering, smoothing, forecasting, rationing, boundary spanning, structural complexity, managerial succession Controlling: linkage techniques- M,A,JV, executive recruitment, advertising Controlling: linkage techniques- M,A,JV, executive recruitment, advertising Manipulating: changing domains, lobbying, involvement in trade associations Manipulating: changing domains, lobbying, involvement in trade associations

Stakeholders Management- groups, interests, power Designing appropriate political bargaining strategies for creating and controlling interactions with stakeholders Designing appropriate political bargaining strategies for creating and controlling interactions with stakeholders  Common conflicts of expectations  Stakeholder mapping  Assessment of power

Resources and Capabilities Resource analysis: physical, human, systems, intangibles. Competency Resource analysis: physical, human, systems, intangibles. Competency Availability, effectiveness, flexibility, balance, fit, slack, strategic standing Availability, effectiveness, flexibility, balance, fit, slack, strategic standing Threshold, unique, inadequate, redundant Threshold, unique, inadequate, redundant Critical success factors Critical success factors Strategic capability Strategic capability

Small Business Strategies Initiative, innovation, flexibility, high risk, short life cycle Initiative, innovation, flexibility, high risk, short life cycle Strategic orientation Strategic orientation Commitment to opportunity Commitment to opportunity Commitment to resources Commitment to resources Control of resources Control of resources Management structure Management structure

Business Level Strategy-the strategy “clock” “No frills” “No frills” Low price Low price Hybrid Hybrid Differentiation Differentiation Focused differentiation Focused differentiation Increased price/standard value Increased price/standard value Increased price/low value Increased price/low value Low value/standard price Low value/standard price

Corporate-Level Strategy The corporate parent –value adding or destroying The corporate parent –value adding or destroying The corporate rationale The corporate rationale The corporate portfolio The corporate portfolio The extend of corporate diversity The extend of corporate diversity Corporate control Corporate control Corporate-level competition Corporate-level competition

Corporate Level Strategies * concentration * market development * product development* innovation *horizontal integration* vertical integration * concentration * market development * product development* innovation *horizontal integration* vertical integration *turnaround * divestiture *liquidation * concentric diversification *conglomerate diversification *joint venture *turnaround * divestiture *liquidation * concentric diversification *conglomerate diversification *joint venture Defender, prospector, analyzer ( env. considerations ) Defender, prospector, analyzer ( env. considerations )

Mergers and Acquisitions Motives Motives  To keep up with a changing environment  Lack of resources and competencies  Meting the key stakeholder’s expectations Evaluation process Evaluation process  Financial analysis  Product and manufacturing  Market share  R&D  Management and key personnel

Strategy Evaluation and Selection Success criteria: Success criteria:  Suitability  Acceptability  Feasibility

Structure and Design Simple structure Simple structure Functional Functional Multidivisional Multidivisional Holding Holding Matrix Matrix Team-based Team-based Project-based Project-based Intermediate structures Intermediate structures

Managing Strategic Change Types of change: Types of change:  Adaptive, innovative and radically innovative change External triggers:technology, customer’s tests, competitor’s activities, materials, legislation, social or cultural values, economic circumstances Internal triggers: job design, product design, office and factory layouts, allocation of responsibilities, technology

International and Global Strategies Global strategy: global market share, globally strategic markets, global balance Global strategy: global market share, globally strategic markets, global balance Levels of international involvement Levels of international involvement The multinational corporation:absolute and comparative advantage, international product life cycle, direct investment The multinational corporation:absolute and comparative advantage, international product life cycle, direct investment The environment of international management The environment of international management Strategic aspect of IM –planning, staffing, directing, controlling Strategic aspect of IM –planning, staffing, directing, controlling Comparative management Comparative management

Business and the Green Environment Essence of the environmental audit Essence of the environmental audit Types of audit Types of audit Data analysis Data analysis Drawing up an environmental policy Drawing up an environmental policy Establishing targets Establishing targets Designing strategies Designing strategies

Business Ethics and Social Responsibility Integrating corporate social responsibility, business ethics and corporate governance Integrating corporate social responsibility, business ethics and corporate governance Factors, causing high and low ethical standards Factors, causing high and low ethical standards Fields of Socially responsible strategies: Fields of Socially responsible strategies:  Environment  Energy  Fair business practices  Human resources  Community involvement  Products Social obligation, social responsibility and social responsiveness Social obligation, social responsibility and social responsiveness