1. Strategic Planning& Competitiveness
Strategic Management
Strategic Planning& Competitiveness

2. Strategic Management – Defined
Art & science of formulating, implementing, and evaluating, cross-functional decisions that enable an organization to achieve its objectives.

3. Adapting to Change – Key Strategic Management Questions
What kind of business should we become?
Are we in the right fields
Are there new competitors
What strategies should we pursue?
How are our customers changing?

4. What do we want to become?
Key Terms
Mission Statement –
What is our business?
Vision Statement –
What do we want to become?

5. Mission Statements: Examples
Components
NASA
To Explore the Universe and Search for Life and to Inspire the Next Generation of Explorers
Does a good job of expressing the core values of the organization. Also conveys unique qualities about the organization.
Walt Disney
Too vague and and unclear. Need more descriptive information about what makes the organization special.
To Make People Happy
Matt H. Evans,

6. Vision How the organization wants to be perceived in the
Components
Vision
How the organization wants to be perceived in the
future – what success looks like
An expression of the desired end state
Challenges everyone to reach for something
significant – inspires a compelling future
Provides a long-term focus for the entire
organization
Matt H. Evans,

7. Examples of Vision Descriptors
Components
Adept
Aggressive
Agile
Aligned
Assertive
Available
Best-in-class
Challenging
Clear
Competent
Complex
Compliant
Conservative
Coordinated
Critical
Direct
Equal
Disciplined
Effective
Efficient
Enduring
Expanding
Expert
Fast
Fast-paced
Financially-sound
Focused
Growth
Healthy
Improving
Incentivized
Increasing
Informative
Innovative
Leading
Logical
Major
Nimble
Pioneering
Protected
Organized
Over-Arching
Quick
Ready
Responsive
Savvy
Simple
Solid
Solvent
Stable
State of the Art
Strong
Streamlined
Sufficient
Strategic
Sustainable
Timely
Value-added
Vigilant
Visionary
World-class
Matt H. Evans,

8. Demographic/Environmental Political, Legal, Governmental
Key Terms
Opportunities & Threats (External)
Analysis of Trends:
Economic
Social
Cultural
Demographic/Environmental
Political, Legal, Governmental
Technological
Competitors

9. Strengths & Weaknesses (Internal)
Key Terms
Strengths & Weaknesses (Internal)
Typically located in functional areas of the firm
Management
Marketing
Finance/Accounting
Production/Operations
Research & Development
Computer Information Systems

10. Key Terms
Strategies
Means by which long-term objectives are achieved

11. A series of goal direceted decisions & actions
What is Strategy?
An integrated and coordinated set of commitments & actions designed to exploit core competencies and gains and gain a competitive advantage.
A series of goal direceted decisions & actions
Strategies is use of engagements for the object.
© 2006 by Nelson, a division of Thomson Canada Limited.

12. What is Strategy in different literature?
“A unified, comprehensive, and integrated plan designed to ensure that the basic objectives of the enterprise are achieved.” (Glueck, 1980:9)
“The pattern or plan that integrates an organization’s major goals, policies, and action sequences into a cohesive whole.” (Quinn, 1980)
“A good strategy… neutralizes threats and exploits opportunities while capitalizing on strengths and avoiding or fixing weaknesses.” (Barney, 1997:17)
“A pattern of resource allocation that enables firms to maintain or improve their performance.
© 2006 by Nelson, a division of Thomson Canada Limited.

13. © 2006 by Nelson, a division of Thomson Canada Limited.
All successful strategies are based on understanding of the organization’s competitive environment.
The competitive environment is complex, and includes anything that can affect the organization’s position relative to that of its competitors.
Competitive enviroment is related with organizations’ products, services and organizational resources.
© 2006 by Nelson, a division of Thomson Canada Limited.

14. Why Strategy is important?
To change on organizations needs
Burning platform
Mission
Vision
Leadership
Strategic management
Political management
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15. Strategy Formulation Mission & Vision External Opportunities & Threats
Internal Strengths & Weaknesses
Long-Term Objectives
Alternative Strategies
Strategy Selection

16. Assessment Model: S W O T
Internal Assessment: Organizational assets, resources, people, culture, systems, partnerships, suppliers, . . .
External Assessment: Marketplace, competitor’s, social trends, technology, regulatory environment, economic cycles .
Easy to Understand
Apply at any organizational level
SWOT
Needs to be Analytical and Specific
Be honest about your weaknesses
SWOT
Good Points
Possible Pitfalls
Matt H. Evans,

17. © 2006 by Nelson, a division of Thomson Canada Limited.
Strategic Manegement
involves;
Organization goals
Goal- oriened action
Related decision and actions
Internal strengts
External oppotunities and threats
© 2006 by Nelson, a division of Thomson Canada Limited.

18. © 2006 by Nelson, a division of Thomson Canada Limited.
Strategic manegement
Makes;
Planning
Organization
Implementing
Controlling
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19. © 2006 by Nelson, a division of Thomson Canada Limited.
Why is SM important?
Given everyone a role
Makes a difference in performance levels
Provides systematic approach to uncertainities
Coordinates & focuses employess
© 2006 by Nelson, a division of Thomson Canada Limited.

20. Basic of Strategic Manegement
There are four aspects are too important;
Interdisciplinary
External focus competition
Internal factors
Future direction
And make: Situation analysis (analsis current situation)
Formulation of strategies (decision strategies)
Implementation of Strategies (putting strategies in action)
Evaluation of strategies( evaluating & changing)
© 2006 by Nelson, a division of Thomson Canada Limited.

21. Comprehensive strategic management model
External
Audit
Mission
&
Vision
Long-Term
Objectives
Generate,
Evaluate,
Select
Strategies
Implement
Strategies:
Mgmt Issues
Implement
Strategies:
Marketing,
Fin/Acct,
R&D, CIS
Measure &
Evaluate
Performance
Internal
Audit

22. The Strategic Management Process
The Strategic Management Process
The full set of commitments, decisions, and actions required for a firm to achieve strategic competitiveness and earn above-average returns.
© 2006 by Nelson, a division of Thomson Canada Limited.

23. The Strategic Management Process
The External
Environment
Strategic Intent
Strategic Mission
Strategic Inputs
The Internal
Environment
Strategy Formulation
Strategy Implementation
Business-Level
Strategy
Competitive Rivalry
and Competitive
Dynamics
Corporate-
Level Strategy
Corporate
Governance
Organizational
Structure and
Controls
Strategic Actions
Acquisition and
Restructuring
Strategies
International
Strategy
Cooperative
Strategy
Strategic
Leadership
Strategic
Competitiveness
Above-Average
Returns
Strategic Outcomes
Feedback

24. Strategic Management and Strategic Competitiveness
Knowledge objectives
Define strategic competitiveness, competitive advantage and above average returns.
Describe the 21st century competitive landscape and explain how globalization and technological changes shape it.
Use the industrial organization (I/O) model to explain how firms can earn above average returns.
Use the resource-based model to explain how firms can earn above-average returns.
© 2006 by Nelson, a division of Thomson Canada Limited.

25. Strategic Management and Strategic Competitiveness
Strategic Management and Strategic Competitiveness
Knowledge objectives – continued…
5. Describe strategic intent and strategic mission and discuss their value.
6. Define stakeholders and describe their ability to influence organizations.
Describe strategists’ work.
Explain the strategic management process.
© 2006 by Nelson, a division of Thomson Canada Limited.

26. Achieving Sustained Competitive Advantage
1. Adapting to change in external trends, internal capabilities and resources
2. Effectively formulating, implementing & evaluating strategies

27. Strategy Implementation
Annual Objectives
Policies
Employee Motivation
Resource Allocation

28. Strategy Evaluation Internal Review External Review
Performance Metrics
Corrective Actions

29. Desired Strategic Outcomes
Strategic Competitiveness
Achieved when a firm successfully formulates and implements a value-creating strategy.
Occurs when a firm develops a strategy that competitors are not simultaneously implementing.
Sustained Competitive Advantage
Provides benefits which current and potential competitors are unable to duplicate.
Above-Average Returns
Returns in excess of what an investor expects to earn from other investments with similar risk.
© 2006 by Nelson, a division of Thomson Canada Limited.

30. Important definitions
Risk
An investor’s uncertainty about the economic gains or losses resulting from a particular investment.
Returns equal to what an investor expects from other investments with similar amount of risk.
Average returns
Strategic management process
The full set of committee's decisions and actions required for a firm to achieve strategic competitiveness and earn above average returns.
© 2006 by Nelson, a division of Thomson Canada Limited.

31. Intended, Emergent and Realized Strategies
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32. Alternative Models of Superior ReturnsO I
Industrial Organization Model
Resource-Based Model
The External Environment
An Attractive Industry
Resources
Capabilities
Competitive Advantage
Strategy Formulation
Assets and Skills
An Attractive Industry
Strategy Implementation
Strategy Implementation
Superior Returns
Superior Returns
© 2006 by Nelson, a division of Thomson Canada Limited.

33. Four Attributes of Resources and Capabilities (Competitive Advantage)
Four Attributes of Resources and Capabilities (Competitive Advantage)
Valuable
Allow the firm to exploit opportunities or neutralize threats in its external environment.
Rare
Possessed by few, if any, current and potential competitors.
Resources and Capabilities
Costly to imitate
When other firms cannot obtain them or must obtain them at a much higher cost.
Organized to be exploited
The firm is organized appropriately to obtain the full benefits of the resources in order to realize a competitive advantage.
© 2006 by Nelson, a division of Thomson Canada Limited.

34. © 2006 by Nelson, a division of Thomson Canada Limited.
Resources and capabilities that meet these four criteria become a source of:
Valuable
Rare
Core Competencies
Core Competencies
Costly to imitate
Resources and Capabilities
Organized to be exploited
© 2006 by Nelson, a division of Thomson Canada Limited.

35. Core Competencies are the basis for a firm’s
Core Competencies are the basis for a firm’s
Competitive advantage
Strategic competitiveness
Core Competencies
Ability to earn above-average returns
© 2006 by Nelson, a division of Thomson Canada Limited.

36. CEO’s ranking of business importance
A strong & well thought out strategy
Maximizing customer satisfaction & loyalty
Business leadership, quality products & services
Concern for consistent profits
Strong & consistent profits
© 2006 by Nelson, a division of Thomson Canada Limited.

37. © 2006 by Nelson, a division of Thomson Canada Limited.
21st Century Values
Flexibility
Speed to market
Innovation
Integration
Handling challenges from constantly changing conditions
Hypercompetition
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38. © 2006 by Nelson, a division of Thomson Canada Limited.
The Global Economy
One in which goods, services, people, skills, and ideas move freely across geographic borders
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39. World competitiveness ratings
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40. Technology and Technological Change
Increasing rate of technological change and diffusion
Perpetual innovation
The information age
Personal computers, cellular phones, artificial intelligence, virtual reality, massive databases, electronic networks, e-business
Increasing knowledge intensity
Information, intelligence, expertise, strategic flexibility.
© 2006 by Nelson, a division of Thomson Canada Limited.

41. © 2006 by Nelson, a division of Thomson Canada Limited.
Internally focused, it is the leveraging of a firms resources, capabilities, and core competencies to establish the firms goals in the competitive environment.
Strategic Intent
Together, strategic intent and strategic mission yield the insights required to formulate and implement strategies.
Externally focused, it is a statement of a firms unique purpose and the scope of it’s operations in product and market terms.
Strategic Mission
© 2006 by Nelson, a division of Thomson Canada Limited.

42. © 2006 by Nelson, a division of Thomson Canada Limited.
Stakeholders
© 2006 by Nelson, a division of Thomson Canada Limited.

43. Organizational strategists
Organizational strategists
Top level managers, executives, top management team, or general managers
© 2006 by Nelson, a division of Thomson Canada Limited.

44. Organizational culture
Organizational culture
A complex set of ideologies, symbols and core values that influence how the firm conducts it’s business.
© 2006 by Nelson, a division of Thomson Canada Limited.

45. If we want to talk about Strategic Management and strategic plan:
We can say; In essence, the strategic plan is a company’s game plan and strategic manegement is related with these game plan .
Copyright 2007 Prentice Hall

46. The Four Elements of Strategic Management
Figure 1
The Four Elements of Strategic Management
Strategic
Thinking
The
Strategy
Formulation
Process
Action
Implementation
Content
CONTEXT
(c) Macmillan & Tampoe 2001

47. Figure 2 - The Strategy Formulation Process
Strategic
Intent
Strategic
Assessment
Strategic
Choice
(c) Macmillan & Tampoe 2001

48. Figure 3 - The Strategy Implementation Process
Programme
& Project
Management
Change
Leadership
Culture Change
Transformed
Enterprise
Structure Change
Process Change
(c) Macmillan & Tampoe 2001

49. Figure 4 - Our complete model
Strategy
Content
Strategic
Thinking
Strategic
Action
CONTEXT
(c) Macmillan & Tampoe 2001

50. Predicting Outcomes of Strategic Decisions
Define the profit pool’s boundaries.
2. Estimate the pool’s overall size.
3. Estimate the size of the value chain.
Reconcile the calculations.
The strategic management process calls for disciplined approaches to the development of competitive advantage.
© 2006 by Nelson, a division of Thomson Canada Limited.

51. Production/Operations Research & Development
Strategic Management achieves a firm’s success through integration ––
Management
Marketing
Finance/Accounting
Production/Operations
Research & Development
MIS
Copyright 2007 Prentice Hall

52. © 2006 by Nelson, a division of Thomson Canada Limited.
Thanks…
© 2006 by Nelson, a division of Thomson Canada Limited.