1. Introduction to Strategic Management
MGT Principles of Management and Business
Introduction to Strategic Management
Week 7

2. Objectives
To explain what managers do in the strategic management process
To explain different types of strategies
To have a look at benchmarking

3. Companies’ Strategies
McDonald’s: 40 stores in India
Starbucks: A new line of healthier and made-from-scratch baked goods
Tata: Acquisition of Jaguar and Land Rover

4. Strategic Management Definition
What managers do to develop an organization’s strategies

5. Strategy
Definition
Plans for how the organization will do what it’s in business to do, how it will compete successfully, and how it will attract its customers in order to achieve its goals

6. Strategic Management Process
External Analysis
Opportunities
Threats
Identify the
organization’s
current mission, goals,
and strategies
Formulate
Strategies
Implement
Strategies
Evaluate
Results
Internal Analysis
Strengths
Weaknesses
Strategic Management Process
A six-step process that encompasses strategy planning, implementation, and evaluation

7. Strategic Management Process
Step 1: Identifying the organization’s current mission, goals, and strategies
Mission: a statement of its purpose
Step 2: Doing an external analysis
Opportunities: positive trends in the external environment
Threats: negative trends in the external environment

8. Strategic Management Process
Step 4: Doing an internal analysis
Resources: an organization’s assets that it uses to develop, manufacture, and deliver products of its customers
Capabilities: an organization’s skills and abilities in doing the work activities needed in its business
Core Competencies: the major value-creating capabilities of an organization
Strengths: any activities the organization does well or any unique resources that it has
Weaknesses: activities the organization doesn’t do well or resources it needs but doesn’t possess

9. Strategic Management Process
SWOT Analysis: the combined external and internal analysis
Step 4: Formulating strategies
Types of Strategies: corporate, competitive, and functional
Step 5: Implementing strategies
Step 6: Evaluating strategies
Questions: How effective have the strategies been at helping the organization reach its goals? What adjustments are necessary?

10. Types of Strategies Corporate Strategy
An organizational strategy that specifies what businesses a company is in or wants to be in and what it wants to do with those businesses
Competitive Strategy
An organizational strategy for how an organization will compete in its business(es)
Functional Strategy
The strategies used in an organization’s various functional departments to support the competitive strategy

11. Corporate Strategies Growth Strategy
A corporate strategy in which an organization expands the number of markets served or products offered either through its current business(es) or through new business(es)
Stability Strategy
A corporate strategy in which an organization continues to do what it is currently doing
Renewal Strategy
A corporate strategy that addresses declining organizational performance

12. Competitive Strategies
Competitive Advantage: what sets an organization apart; its distinctive edge
Cost Leadership Strategy
When an organization competes on the basis of having the lowest costs in its industry
Differentiation Strategy
When an organization competes on the basis of having unique products that are widely valued by customers
Focus Strategy
When an organization competes in a narrow segment or niche with either a cost focus or a differentiation focus

13. Benchmarking Definition
The search for the best practices among competitors or non competitors that lead to the superior performance

14. Learning Outcomes
Strategic management is important for the organization’s continuity, survival, and success
Strategic management process consist of 6 steps that managers follow
There three different types of strategies: corporate, competitive, and functional
Benchmarking can be used to find better ways in having things done for the corporation