Strategic Management ( 6 questions)
odehe
strategic_management_1.pptStrategic Management
Session #1
- What is Strategic Management?
- How do you do it? The Process
- Why do it? Benefits
- Adapting to Change
- Balancing Intuition & Analysis
- Integrating Analysis and Intuition
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Art & science
of formulating, implementing, and evaluating, cross-functional decisions
that enable an organization
to achieve its objectives
Strategic Management – Defined
The strategic plan is a
company’s ROAD MAP
- 1.-Formulation
- Situation Analysis
- Vision & Mission
- Goals
- Objectives
- Strategies - 2.-Implementation
- Accountability
- Action Plans - 3.-Evaluation
- Control System
- Evaluation
External
Audit
Internal
Audit
Long-Term
Objectives
Generate,
Evaluate,
Select
Strategies
Implement
Strategies:
Mgmt Issues
Implement
Strategies:
Marketing,
Fin/Acct,
R&D, CIS
Measure &
Evaluate
Performance
Comprehensive Strategic Management Model
Strategic Management achieves a firm’s success through integration of the various functions
Management
MIS
Production/Operations
Finance/Accounting
Marketing
Research & Development
Personnel
Benefits of Strategic Management
- Proactive in shaping firm’s future
- Initiate and influence firm’s activities
- Formulate better strategies
- Systematic, Logical, Rational
Benefits of Strategic Management
- Identification of opportunities
- Objective view of management problems
- Improved coordination & control
- Minimizes adverse conditions & changes
- Decisions that better support objectives
Benefits of Strategic Management
- Effective allocation of time & resources
- Internal communication among personnel
- Integration of individual behaviors
- Clarify individual responsibilities
- Encourage forward thinking
Benefits of Strategic Management
- Encourages favorable attitude toward change
- Provides discipline and formality to
the management
of the business
Benefits of Strategic Management
Non-Financial Benefits
- Improved understanding of competitors strategies
- Enhanced awareness of Challenges (threats)
- Reduced resistance to change
- Enhanced problem-prevention capabilities
Benefits of Strategic Management
Financial Benefits
- Improvement in sales
- Improvement in profitability
- Productivity improvement
Why Some Firms Do No Strategic Planning
- Fear of failure
- Overconfidence
- Prior bad experience
- Self-interest
- No perceived need
- Have no process
Why Some Firms Do No Strategic Planning
- Poor reward structures
- Fire-fighting
- Waste of time
- Too expensive
- Laziness
- Content with success
Organizations must monitor change
- On-going process
- Review Internal and external events
- Make Timely Adjustments
It is Critical to Adapt to Change
Change is Rapid & Accelerating
Need for a Cross-Impact Analysis
Dynamic & Continuous Process
Need to Track Trends
Need to Consider Potential Changes
& Develop Contingency Plans
Need to Consider Potential Impact
on Various Audiences
Cross-Impact Analysis
Economic Trends
New Opportnities
Technology
Demographics
Social Political
International
Forces
Customers
Driving Forces
Competition
Rate & magnitude of change increasing dramatically
Adapting to Change
E-commerce
Demographics
Technology
Peter Drucker: -- Think through the overall mission of a business. Ask the key question: “What is our Business?”
Prime Task of Strategic Management
Today the Question is “What Should our business Be?”
Adapting to Change
Key Strategic Management Questions
Requires long-term focus
Effective Adaptation
1. Adapting to change in external trends,
internal capabilities and resources
Achieving Sustained Competitive Advantage
2. Effectively formulating, implementing &
evaluating strategies
Integrating Intuition & Analysis
2
Analytical Thinking
Intuitive Thinking
Integrating Intuition & Analysis
Involve all levels of management
Use both Intuition & Objective Analysis for Balanced Judgments
Apply it to all decisions
The strategic management process attempts to organize quantitative and qualitative information under conditions of uncertainty
Integrating Intuition and Analysis
Intuition is based on:
- Past experiences
- Judgment
- Feelings
Integrating Intuition and Analysis
Intuition is useful for
decision making in:
- Conditions of great uncertainty
- Conditions with little precedent
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