Done by: Latoya Njokwe

STRATEGIC MANAGEMENT

This presentation is a combination of work done by the following authors:

Alicia Schetteman and Dr.K.Prabhaka.

Acknowledgements

What is a strategy? How to create strategies that lead to

superior performance? How to implement? How you have to relate to the environment? Why strategy?

What you will learn?

Strategy is a set of related actions that managers take to increase organization’s performance.

If it results in superior performance to that of its rivals it is said to have competitive advantage.

Example: Wal Mart, American Airlines, Airtel

Strategy (Operationalization)

Strategic planning is not A substitute for strategic thinking,

acting, and learning A substitute for leadership

Strategy (operationalization)

Top 10 Strategic Planning Tips1. Know what you’re talking about2. Know what your goal for planning is3. Know what strategic planning will NOT do4. Strategic planning flows from mission5. Share your strategic planning work with others6. Focus, focus, focus 7. Trade assistance with other organizations (Jea Nae

Remala)8. You need to know where you are now to know

where you want to go9. Need to move goals to action plans10. Tie goals to budgets and performance

A Good Strategic Plan should . . . • Address critical performance issues• Create the right balance between what the

organization is capable of doing vs. what the organization would like to do

• Cover a sufficient time period to close the performance gap (3-5 years reasonable time)

• Visionary – convey a desired future end state• Flexible – allow and accommodate change• Guide decision-making at lower levels –

operational, tactical, individual

How to most effectively manage a organizational strategy making process to create competitive advantage.

Strategic Leadership

• SMP is the process by which managers select and then implement a set of strategies that aim to achieve a cometitive advantage.

• Strategy formulation is selection of strategies • Strategy implementation is the task of

putting strategies in to action; it includes designing; delivering; and supporting products; improving efficienty and effectiveness of organiztions; desinging organizational structure; Control systems and culture.

Strategy Making Process

Rational planning by top management?

Strategic Planning

Defining the Mission and Setting Top-Level Goals

External Analysis of Opportunities and Threats

Internal Analysis of Strengths and Weaknesses

Selection of Appropriate Strategies

Implementation of Chosen Strategies

Basic Strategic Planning Model

What are elements of Strategic Thinking?

8/10/2011Strategic Management 1-12

• Mission– Sets out why the organization exists and what it

should be doing from point of view of customer.• Major goals

– Specify what the organization hopesto fulfill in the medium to long term.

• Objectives – Are objectives to be attained that lead to superior

performance.

Mission and Goals

Perception is strong and sight is weak. In strategy it is important to see distant things as if they were close and to take a distanced view of close things.Miyamoto Musashi 1584-1645, legendary Japanese swordsman

Prespective Quote on Vision

Identify strategic opportunities and threats in the operating environment.

External Analysis

Identify strengths◦ Quality and quantity of resources available◦ Distinctive competencies

Identify weaknesses◦ Inadequate resources◦ Managerial and

organizational deficiencies

Internal Analysis

• Cost leadership– Attaining, then using the lowest total cost basis as

a competitive advantage; Example of Intel • Differentiation

– Using product features or services to distinguish the firm’s offerings from its competitors;Apple Computers

• Market niche focus– Concentrating competitively on a specific market

segment; Nala Appakadai

Business-Level Strategies

Focus is on improving the effectiveness of operations within a company.◦ Manufacturing◦ Marketing◦ Materials management◦ Research and development◦ Human resources

Functional-Level Strategies

Multidomestic International Global Transnational

Global-Level Strategies

Vertical integration Diversification Strategic alliances Acquisitions New ventures Business portfolio restructuring

Corporate-Level Strategies

In real life, strategy is actually very straightforward. You pick a general direction and implement like hell-Jack Welch in Winning, 2005

Prespective Quote

• Designing organizational structure• Designing control systems

– Market and output controls– Bureaucratic controls– Control through organizational culture– Rewards and incentives

• Matching strategy, structure, and controls– Congruence (fit) among strategy,

structure, and controls

Strategy Implementation

The only constant is change. Success requires adapting strategy and

structure to a changing world.

Managing Strategic Change

General managers◦ Responsible for the overall (strategic)

performance and health of the total organization. Operations managers

◦ Responsible for specific businessfunctions or operations.

Strategic Managers

Strategic Managers for All Levels

Vision, eloquence, and consistency Commitment to the vision Being well informed Willingness to delegate and empower Astute use of power Emotional intelligence

Strategic Leadership

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.

Strategy as an Emergent Process

Intended and Emergent Strategies

FIGUR 1.3

Mintzberg’s Intended Strategy and

Emergent Strategy Five P’s of Strategy 1. Plan2. Ploy3. Pattern4. Position5. Prespective

The Strategic Management Process for Intended and Emergent Strategies

FIGURE 1.4

Planning under uncertainty◦ Scenario planning for dynamic environmental

change Ivory tower planning

◦ Lack of contact with operational realities◦ The importance of involving operating managers◦ Procedural justice in the decision-making process

Engagement, explanation, and expectations Planning for the present: Strategic Intent

◦ Recognition of the static nature of the strategic fit model

◦ Strategic intent in focusing the organization on winning by achieving stretch goals

Strategic Planning in Practice

• Cognitive biases systematically influence the rationality of decision makers;Psychologists have articulted more than fifty cognitive biases.

Improving Strategic Decision Making

FIGURE 1.5 ( Adopted from Strategic Mangement by Hill and Jones, 2009 e )

Pitfalls of groupthink◦ Failing to question underlying assumptions.◦ Coalescing around a single person or policy.◦ Filtering out conflicting information.◦ Developing after-the-fact rationalizations.◦ Having an emotional (nonobjective)

commitment to an action.

Groupthink and Strategic Decisions

How to create strategic alternatives How to select alternative that is most

suitable for organization Implement the strategies that will help the

stakeholders to maximise their wealth.

At the end of the course You will uderstand

http://www.slideshare.net/kprabhakar975/introduction-to-strategic-management-8863746?qid=a4396c5c-8164-4490-b50c-8e59576677f2&v=default&b=&from_search=3

http://www.grad.niu.edu/grad/apply/atlarge.shtml

References