1. Overview of Strategic Management

2. Overview Why do some firms succeed while others fail?
A central objective of strategic management is to learn why this happens.
What is strategy?
An action a company takes to attain superior performance.
What is the strategic management process?
The process by which managers choose a set of strategies for the enterprise to pursue its vision.

3. A Company’s Strategy is Partly Planned and Partly Reactive
Abandoned strategy features
Company Experiences, Know-how, Resource Strengths and Weaknesses, and Competitive Capabilities
Planned Strategy
New initiatives plus ongoing strategy features continued from prior periods
Actual Company Strategy
Adaptive reactions to changing circumstances
Reactive Strategy
A Company’s Strategy is Partly Planned and Partly Reactive

4. Factors Shaping the Choice of Company Strategy
Social, political, regulatory and community factors
Competitive conditions and industry attractiveness
Company opportunities and threats to company’s well-being
 External Factors
Determine relevance of internal and external factors
Identify and evaluate alternatives
Craft
the
strategy
Company’s Strategic Situation
Resource strengths, capabilities, and weaknesses
Influences of key executives
Shared values and company culture
 Internal Factors
Factors Shaping the Choice of Company Strategy

5. Strategy as an Emergent Process
Strategy making in an unpredictable world
Creates the necessity for flexible strategic approaches.
Strategy making by lower-level managers
Strategy evolves through autonomous action.
Serendipity and strategy
Accidental discoveries and happenstances can have dramatic effects on strategic direction.
Intended and emergent strategies
Realized strategies are combinations of intended and emergent strategies.

6. Why Do Strategies Evolve?
A company’s strategy is a work in progress
Changes may be necessary to react to
Shifting market conditions
Technological breakthroughs
Fresh moves of competitors
Evolving customer preferences
Emerging market opportunities
New ideas to improve strategy
Crisis situations

7. Strategic Management
Set of decisions and actions that result to the formulation and implementation of plans designed to achieve a company’s objectives
Study of why and how some firms outperform others

8. Benefits of Strategic Management
Strategy formulation activities enhance the firm’s ability to prevent problems.
Group-based strategic decisions are likely to be drawn from the best available alternatives.
The involvement of employees in strategy formulation improves their understanding of the productivity-reward relationship in every strategic plan and, thus, heightens their motivation.

9. Gaps and overlaps in activities among individuals and groups are reduced as participation in strategy formulation clarifies differences in roles.
Resistance to change is reduced.

10. Risks of Strategic Management
The time that managers spend on the strategic management process may have a negative impact on operational responsibilities.
If the formulators of strategy are not intimately involved in its implementation, they may shirk their individual responsibility for the decision reached.
Strategic managers must be trained to anticipate and respond to the disappointment of participating subordinates over unattained expectations.

11. Formality in Strategic Management

12. What is Formality?
The degree to which participation, responsibility, authority, and discretion in decision-making are specified in strategic management.

13. Entrepreneurial Mode
The informal, intuitive, and limited approach to strategic management associated with owner-managers of smaller firms.

14. Planning Mode
The strategic formality associated with large firms that operate under a comprehensive, formal planning system.

15. Adaptive Mode
The strategic formality associated with medium-sized firms that emphasize the incremental modification of existing competitive approaches.

16. Key Attributes of Strategic Management
Directs the organization toward overall goals and objectives
Includes multiple stakeholders in decision making
Needs to incorporate short-term and long-term perspectives
Recognizes trade-offs between efficiency and effectiveness

17. Critical Tasks of Strategic Management
Formulate the company’s mission
Conduct internal analysis
Assess the company’s external environment
Analyze company’s options
Identify most desirable option/s
Select long-term objectives and grand strategies
Develop annual objectives and short-term strategies
Implement the strategic choices
Evaluate success of the strategic process

18. Dimensions of Strategic Decisions
Strategic issues
require top-management decisions
require large amounts of the firm’s resources
often affect the firm’s long-term prosperity
are future oriented
usually have multifunctional or multi-business consequences
require considering the firm’s external environment

19. Task 1 Task 2 Task 3 Task 4 Task 5 Formulate Strategy to Achieve
Goals &
Objectives
Set
Develop
Vision
and
Mission
Implement
Execute
Improve/
Change
Revise as
Needed
Recycle
as Needed
Task 1
Task 2
Task 3
Task 4
Task 5
Monitor,
Evaluate,
and Take Corrective
Action

20. Develop Mission and Vision
What is a Company Mission?
This is the fundamental purpose that sets a firm apart from other firms of its type and identifies the scope of its operations in product and market terms.
It sets out why the organization exists and what it should be doing.
It broadly outlines the organization’s future course and serves to communicate “who we are, what we do, and where we’re headed”

21. Coca-Cola Company
Mission Everything we do is inspired by our enduring mission:
To Refresh the World... in body, mind, and spirit.
To Inspire Moments of Optimism... through our brands and our actions.
To Create Value and Make a Difference... everywhere we engage.

22. Develop Mission and Vision
What is a Vision?
This is a general statement of the organization’s intended direction that evokes emotional feelings in organization members.
A strategic vision describes the route a company intends to take in developing and strengthening

23. Coca-Cola Company
Vision To achieve sustainable growth, we have established a vision with clear goals.
Profit: Maximizing return to shareowners while being mindful of our overall responsibilities.
People: Being a great place to work where people are inspired to be the best they can be.
Portfolio: Bringing to the world a portfolio of beverage brands that anticipate and satisfy peoples’ desires and needs.
Partners: Nurturing a winning network of partners and building mutual loyalty.
Planet: Being a responsible global citizen that makes a difference.

24. Linking the Vision with Company Values
Companies often develop a statement of values to guide a company’s pursuit of its vision and strategy and paint the white lines for how the company’s business is to be conducted
Values statements remain a bunch of nice words until the espoused beliefs, traits, and behaviors are incorporated into company’s operations and work practices and are used as the benchmark for job appraisal, promotions, and rewards.

25. Coca-Cola Company
Values We are guided by shared values that we will live by as a company and as individuals.
Leadership: "The courage to shape a better future"
Passion: "Committed in heart and mind"
Integrity: "Be real"
Accountability: "If it is to be, it’s up to me"
Collaboration: "Leverage collective genius"
Innovation: "Seek, imagine, create, delight"
Quality: "What we do, we do well"