Strategic managementStrategic management

Lecture 1. Lecture 1.

Concepts and process od strategic Concepts and process od strategic managementmanagement

SSchedulechedule1.1. Sept. 11.Sept. 11. IIntroduction,ntroduction, concepts, process of strategy concepts, process of strategy

2.2. Sept. 18.Sept. 18. Analysis of the environment Analysis of the environment

3.3. Sept. 25.Sept. 25. RResources and capabilities esources and capabilities

4.4. Oct. 2. Oct. 2. Seminar: environment and resource analysisSeminar: environment and resource analysis

5.5. Oct. 9. Oct. 9. Competive advantages, and strategic Competive advantages, and strategic alternativesalternatives

6.6. Oct. 16. Oct. 16. Seminar: Strategic options Seminar: Strategic options

7.7. Nov. 6. Nov. 6. Stakeholders, and corporate governanceStakeholders, and corporate governance

8.8. Nov. 13. Nov. 13. PPortfolioortfolio-models-models, diversification, diversification

9.9. Nov. 20 Nov. 20 Decision, and strategic goalsDecision, and strategic goals

10.10. Nov. 27. Nov. 27. Seminar: Stakeholders, and goalsSeminar: Stakeholders, and goals

11.11. Dec. 4. Dec. 4. Implementation of the strategy Implementation of the strategy

12.12. Dec. 11. ODec. 11. Organization, rganization, culture, and change management culture, and change management

13.13. Dec. 18 Dec. 18 Seminar or examSeminar or exam

Course textbooksCourse textbooks

Essential:Essential:GGerry Johnson, Kevan Scholes, erry Johnson, Kevan Scholes,

Richard Whittington. Richard Whittington. Exploring Corporate Exploring Corporate StrategyStrategy. 7. 7th th

ed, 200ed, 20055

Or any other books from Johnson, and ScholesOr any other books from Johnson, and Scholes Exlporing Corporate Exlporing Corporate Strategy. Strategy.

Assessment Assessment

WWritten examritten exam (50%)(50%)

Workbook: submitt et the end of Workbook: submitt et the end of the semesterthe semester (50%) (50%)

StrategyStrategy

The sThe strategy trategy

is about winning !is about winning !

The early days …The early days …

““Initially Initially strategosstrategos refered to a role (a refered to a role (a general in command of an army). Later it general in command of an army). Later it came to mean ‘the art of the general‘, came to mean ‘the art of the general‘, which is to say the psychological and which is to say the psychological and behavioral skills with which he occupied the behavioral skills with which he occupied the role. By the time of Pericles (450 BC) it role. By the time of Pericles (450 BC) it came to mean managerial skill came to mean managerial skill (administration, leadership orienta-tion, (administration, leadership orienta-tion, power). And by Alexander‘s time (330 BC) it power). And by Alexander‘s time (330 BC) it refered to the skill of employing forces to refered to the skill of employing forces to overcome opposition and to create a unified overcome opposition and to create a unified system of global governance“system of global governance“

The strategy and tactics by Clausewitz The strategy and tactics by Clausewitz

The tactics: using the army to win The tactics: using the army to win the battle. the battle.

The strategy: using the battles to The strategy: using the battles to win the war. win the war.

A Definition of StrategyA Definition of Strategy

Strategy is: Strategy is: • the the directiondirection and and scopescope of an organisation, of an organisation, • over the over the long term,long term, • which achieves which achieves advantageadvantage for the for the organisation,organisation,• through configuration of its through configuration of its resources,resources, • within a within a changingchanging environment,environment, • to meet the to meet the needs of markets,needs of markets, and and • to fulfill to fulfill stakeholderstakeholder expectations. expectations.

The purpose of the strategy?The purpose of the strategy?

The strategy are likely to be concerned with The strategy are likely to be concerned with scope scope of an of an organization’s activities, organization’s activities,

The strategy is to do with the The strategy is to do with the maching of maching of activities of an activities of an organizaton to the organizaton to the environmentenvironment in which operat in which operat

The strategy is also to do with the The strategy is also to do with the maching of themaching of the organizaton’s activities to its organizaton’s activities to its resource capabilityresource capability, ,

The strategy have major The strategy have major resource implicationsresource implications for the for the organizationorganization

The strategy are likely to The strategy are likely to affect operational decisions, affect operational decisions,

The strategy will The strategy will be affected by values and expectationsbe affected by values and expectations of those who have power in and around the organizaton, of those who have power in and around the organizaton,

The strategy likely to The strategy likely to affect the long term directionaffect the long term direction of an of an organizationorganization

Different types of managerial problemDifferent types of managerial problem

Urgent problemsUrgent problems Not urgent problemsNot urgent problems

Important Important problemsproblems

Crisis management Crisis management ((I have to do..)I have to do..)

Strategic managementStrategic management(I really must get around to (I really must get around to doing)doing)

Not Not important important problemsproblems

Tactical Tactical managementmanagement(I always seems to get (I always seems to get trapped doing..)trapped doing..)

Operational Operational managementmanagement((I’ll probably ende up just I’ll probably ende up just doing..) doing..)

Important problems: Important problems: changingchanging of established rules and processes of established rules and processes

Urgent problems: Urgent problems: maintainingmaintaining the established rules and processes the established rules and processes

The difference between the strategic and The difference between the strategic and operational types of managementoperational types of management

Strategic Strategic management management

Operational managementOperational management

Ambiguity, Complexity, Ambiguity, Complexity, Non-rutine decisions Non-rutine decisions

Simple modells, and Simple modells, and Routinised decisionsRoutinised decisions

Organization-wideOrganization-wide Operationally specificOperationally specific

Fundamental, and Fundamental, and significant changesignificant change

Small-scale changeSmall-scale change

Envirionment or Envirionment or expectation drivenexpectation driven

Resource drivenResource driven

The difference of the strategic and traditional The difference of the strategic and traditional approacheapproache

Strategic approacheStrategic approache Traditional approacheTraditional approache

Concentrate on the Concentrate on the environment environment

Concentrate on the Concentrate on the companycompany

Built on appraisal of the Built on appraisal of the market and competition market and competition

Built on appraisal of the Built on appraisal of the past achievement of the past achievement of the companycompany

Aims to utilize of the Aims to utilize of the competitive advantagescompetitive advantages

Aims to continue of the Aims to continue of the past trendspast trends

The Process View: Competitive StrategyThe Process View: Competitive Strategyaas a Sequence of Steps that may overlaps a Sequence of Steps that may overlap

Tasks : Key Questions ...

Competitive & IndustryAnalysis

Strategy formulation

Implementation andControl

Where do we stand ?

Where do we want to go ?

How do we get there ?

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Strategicanalysis

Strategyimplementation

Strategic choice

Basic model of the strategic management process

The strategic analysisThe strategic analysis

The strategic analysis is concerned with The strategic analysis is concerned with understanding the strategic position of an understanding the strategic position of an organizaton. organizaton.

The main factors of the strategic analysis: The main factors of the strategic analysis: organization. organization.

The environment: provide on one hand threats upon the The environment: provide on one hand threats upon the firm, and the same environment provide opportunities. firm, and the same environment provide opportunities.

The resources: provide tools to ansvere the environmantal The resources: provide tools to ansvere the environmantal challenges, and determine strengths and weaknesses of the challenges, and determine strengths and weaknesses of the organizations,organizations,

Culture and expectations: determine values and Culture and expectations: determine values and expectations of those who have power in and around the expectations of those who have power in and around the organizaton, organizaton,

The strategic choice and decisionThe strategic choice and decision

The strategic choice is concerned with the strategic The strategic choice is concerned with the strategic options, and a series of strategic decisions. options, and a series of strategic decisions.

The main factors of the strategic choice: The main factors of the strategic choice: Identifying and generating strategic options, Identifying and generating strategic options, Evaluate of the strategic options in the context of Evaluate of the strategic options in the context of

the strategic analysis to assess their relaitive the strategic analysis to assess their relaitive meritsmerits

Selection of new strategy, selectiong those option Selection of new strategy, selectiong those option which the organization (and the main which the organization (and the main stakeholders) will pursuestakeholders) will pursue

The strategic implementationThe strategic implementation

The strategic implementation is concerned with the The strategic implementation is concerned with the translation of strategy into action, projects, and translation of strategy into action, projects, and programms. programms.

The main factors of the implementation process: The main factors of the implementation process: Planning and allocating resources, and set up the Planning and allocating resources, and set up the

controll systemscontroll systems Re-form the organizational structure, design a Re-form the organizational structure, design a

new culture if it needs. new culture if it needs. Managing strategic change Managing strategic change

Intended strategy

Unrealisedstrategy

Realisedstrategy

Imposedstrategy

Strategyas outcome

(of cultural andpolitical processes)

Strategy development routes

ContinuityContinuity IncrementalIncremental FluxFlux TransformationalTransformational

Patterns of strategy development

Strategic decisions egStrategic decisions eg

Product launch

Acquisition

Divestment

Overseas expansion

Strategies evolve and informStrategies evolve and informstrategic decisions, which instrategic decisions, which in

turn consolidate strategicturn consolidate strategicdirectiondirection

Evolving Evolving strategicstrategicdirectiondirection

Strategic evolution and consolidation

Source: Adapted from P. Grinyer and J.-C. Spender,Turnaround: Managerial recipes for strategic success, Associated Business Press, 1979, p. 203

The paradigmThe paradigm Development Development of strategyof strategy

Implementationmplementation CorporateCorporateperformanceperformance

ififunsatisfactoryunsatisfactory

Step 1Step 1Tighter controlTighter control

Step 2Step 2Reconstruct or developReconstruct or developnew strategynew strategy

Step 3Step 3Abandon paradigmAbandon paradigmand adopt a new oneand adopt a new one

The dynamics of paradigm change

Industry and Competitive Analysis - QuestionsIndustry and Competitive Analysis - Questions

Tasks :

What is our business ?How do we create value ?

What are our organizational and/or technological capabilities ?

Who are we in business with ?

How is our business/industry changing ?What drives this change ?

What are our strengths and weaknesses ?What opportunities open up, and what threats exist ?

Competitive & IndustryAnalysis

("Where do we stand?")

Strategy formulation("Where do we want

to go ?")

Implementation andControl

("How do we get there?")

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