Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -1 Art & science of formulating, implementing, and evaluating, cross-functional decisions that enable an organization to achieve its objectives Strategic Management –Defined

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch Stages of the Strategic Management Process Strategy formulation Strategy implementation Strategy evaluation

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -3 Vision & Mission Strategy Formulation External Opportunities & Threats Internal Strengths & Weaknesses Long-Term Objectives Alternative Strategies Strategy Selection

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -4 Strategy Implementation Annual Objectives Policies Employee Motivation Resource Allocation

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -5 Strategy Evaluation Internal Review External Review Performance Measurement Corrective Action

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -6 Organizations should continually monitor internal and external events and trends so that timely changes can be made as needed Adapting to Change

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -7 Anything that a firm does especially well compared to rival firms Strategic Management is Gaining and Maintaining Competitive Advantage

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -8 Vision Statement – What do we want to become? Mission Statement – What is our business? Vision and Mission Statements

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -9 External Opportunities and Threats Analysis of Trends  Economic  Social  Cultural  Demographic/Environmental  Political, Legal, Governmental  Technological  Competitors

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch  Controllable activities performed especially well or poorly  Determined relative to competitors Internal Strengths and Weaknesses

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch  Specific results that an organization seeks to achieve in pursuing its basic mission  Long-term means more than one year Long-Term Objectives

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch Strategies Examples  Geographic expansion  Diversification  Acquisition  Product development  Market penetration  Retrenchment  Divestiture  Liquidation  Joint venture

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch Benefits of Strategic Management

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 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

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 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

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 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

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 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