2 Lecture Topics Concept of Strategic Management Path od Course Roles in Strategic ManagementDeliberate and Emergent StrategiesVisionMissionObjectivesFinancialStrategicCase Study: Sears Roebuck
3 Concept of Strategic Management Analysis (External and Internal Environments)Decisions (Formulating Strategy)Actions (Implementing StrategyAn organization undertakes in order to create and sustain competitive advantages and satisfy its multiple stakeholders.
4 In short,Strategic Management is about how an organization adds value and competes in its environment.
5 Strategic Management seeks to answer 6 key questions: What good or service do we really sell?How will we produce our goods or deliver our services?Who will buy our goods or services?How will we finance the operation?How much risk are we willing to take?How will we implement our strategy?
6 More Broadly, Three Big Strategic Questions Where are we now?Where do we want to go?Business(es) to be in and market positions to try and achieve?Buyer needs and groups to serve?Outcomes to achieve?How do we get there?
7 Path of this courseGiven this background on strategic management, the course follows a path intended to give you experience in thinking about and applying strategic management concepts forAnalysis (External and Internal Environments)Decisions (Formulating Strategy)Actions (Implementing Strategy
8 Strategic Management Course Skills Identification of core problems or issues in a business situation or caseAssessment of opportunities and threats in the environment and the strengths and weaknesses of an organization and its managers.Analysis of strategic alternatives from the perspectives of a variety of stakeholders.
9 Strategic Management Course Skills (Continued) Formulation and selection of specific courses of action to implement chosen strategiesFocused application of analytical skills from functional areas—production, finance, marketing, operations research, personnel, and so forth—to effectively develop, select, and implement competitive strategiesOral and written communication of analyses and recommendations for action.
10 Roles in Strategic Management or, Who Makes Strategy? Top Management—President, Senior Organization ExecutivesBoard of DirectorsManagers of Subsidiary Business UnitsFunctional Area ManagersOperating ManagersEmpowered Employees
11 Traditional Flow of Strategic Management Top ManagementSubsidiary FunctionalManagement ManagementOperating ManagementEmployees
12 Modern Flow of Strategic Management Top ManagementSubsidiary FunctionalManagement ManagementOperating ManagementEmployees
13 Why Modern Flow of Strategic Management? Changes in and heightened competition driven byPressure for low cost products and servicesHigher quality requirementsGlobalizationIncreasing rate of technological change and diffusionInformation technologyKnowledge as an organizational resource
15 Setting Direction for the Organization VisionMissionObjectivesFinancialStrategic
16 VisionAn inspiring, long-term “dream” about what the organization will achieve in the futureRepresents a destination driven by and invoking passion
17 Example: Microsoft Vision Empower people through great software anytime, anyplace, and on any device
18 Mission Provides more specifics for the vision Includes such considerations:Identification of products offered and customers served (What business are we in?)How the company will compete (low price, innovation, service)Ethical values of organizationRelations with employees and other stakeholders
19 Example Points From: Honda Mission Statement Proceed always with ambition and youthfulness.Respect sound theory, develop fresh ideas, and make the most effective use of time.Enjoy your work and always brighten your working atmosphere.Strive constantly for a harmonious flow of work.Be ever mindful of the value of research and endeavor.
20 Develop a Vision and Mission Statement for the College of Economics and Business
21 ObjectivesProvides more specific direction on what the organization must do to achieve its vision and mission—interim steps toward achieving the vision and mission.As interim steps, objectives areLong-termShort-term
22 Objectives Strategic Financial Outcomes focused on improving long-term competitive position of the organizationFinancialOutcomes focused on improving financial performance
23 Example Strategic Objectives Increase firm’s market shareBoost firm’s reputation with customersStrengthen presence in international marketsBecome leader in new product innovationAttain lower overall costs than rivalsSurpass competitors in quality or product performance
24 Example Financial Objectives Increase sales growth 6 to 8% per yearCut costs by 5% per year every yearIncrease annual dividends to shareholders by 5% per yearAchieve highest Return on Investment (ROI) in industry
25 Criteria for Objectives Specific: precisely what needs to be achievedMeasurable: at least one indicator that measures progress toward fulfilling objectiveAppropriate: consistent with vision and mission statementsRealistic: must be achievableTime-based: must have a deadline for achieving the objective
26 Vision, Mission, and Objectives Concluding pointsSet a philosophy and direction for strategy development and organizational actionShould represent permanent principles for the organization, but adaptable to changing circumstances—beware changes that reduce ambitions.