ch 01_instructor ppt global edition.ppt

8/11/2019 Ch 01_Instructor PPT Global Edition.ppt

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StrategicManagement:

Creating

CompetitiveAdvantages

Chapter One


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Learning Objectives

After reading this chapter, you should have a good

understanding of:

LO1.1The definition of strategic management

and its four key attributes.

LO1.2The strategic management process and its

three interrelated and principal activities.

1-2


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Two Perspectives of Leadership

Romantic view

Leader is the key force

in organizations

successExternal control

perspective

Focus is on external

factors that may affectan organizations

success

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QUESTION

A CEO made a lot of mistakes such as committingerrors in assessing the market and competitiveconditions and improperly redesigning theorganization into numerous business units. Sucherrors led to significant performance declines. Thisillustrates the __________ perspective ofleadership.

A. External control

B. Romantic

C. Internal mechanism

D.Operational

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Example: 3M

Elements of Buckleys turnaround

Set clear business goals for the company

Wanted 3M to develop lower-costproducts to compete in emerging markets

Became an outspoken champion for 3M

labs

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The Basic Framework Strategy:

the Link between the Firm and its

Environment

THE FIRM

Goals &

Values

Resources &

Capabilities

Structure &Systems

THE

INDUSTRY

ENVIRONMENT

Competitors

Customers

Suppliers

STRATEGY

STRATEGY

2010 Robert M. Grant

www.contemporarystrategyanalysis.com


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What is Strategic Management?

Strategic

management must

become both a

process and a wayof thinking

throughout the

organization

Leaders must be

proactive, anticipate

change, and

continually refinechanges to their

strategies

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Defining Strategic Management

Strategic management

Analyses, decisions, and actions an

organization undertakes in order to create

and sustain competitive advantages

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Analysis

Strategic goals

Internal and external environment of the firm

Strategic decisions

What industries should we compete in?

How should we compete in those industries?

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Actions

Allocate necessary resources

Design the organization to bring intended

strategies to reality

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1-1111

1950sFinancial budgeting:

Operational budgeting

Capital budgeting (the

wonders of DCF)

1960s & early 1970sCorporate planning:

Corporate plans

based on 5-10 yr economic

forecasts

Diversification

Late 1970s & 1980s

Emergence of Strategic

Management:

Industry analysis

Competitive positioning

Strategic priorities: locating

in attractive industries &

establishing market

leadership

1990s & early 2000s

Quest for Shareholder Value:

Refocusing, outsourcing, delayering, costcutting

Quest for Competitive Advantage:Emphasis on resources &

capabilities

Flexibility & innovation

Collaborationalliances, networks

Succeeding in dynamic (Schumpeterian)

markets

?

3 key changes:

1. Changing concept of strategy2. Changing processes of strategy formulation

3. New tools of strategy analysis

The Evolution of Strategic Management


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Strategic Management Concepts

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Exhibit 1.1


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Key Attributes of Strategic

Management

Stakeholders

those individuals, groups, and organizations who

have a stake in the success of the organization,

including owners (shareholders in a publicly heldcorporation), employees, customers, suppliers,

the community at large,

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Key Attributes of Strategic

Management

Ambidexterity

The challenge managers face of both aligning

resources to take advantage of existing product

markets as wellas proactively

exploring new

opportunities

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Ambidextrous Behaviors in Individuals

They take time and

are alertto

opportunities beyond

the confines of theirown jobs

They are brokers,

always looking tobuild internal

networks

They are cooperative

and seek out

opportunities to

combine their effortswith others

They are multitaskers

who are comfortablewearing more than

one hat

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Strategic Management Process

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Exhibit 1.2


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Strategic

ManagementProcess

Exhibit 1.3

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The Strategic

Management

Process


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Strategy Analysis

Consists of advance work that must be

done in order to effectively formulate and

implement strategies

Starting point

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Strategy Formulation

Strategy formulation

decisions made by firms regarding investments,

commitments, and other aspects of operations

that create and sustain competitive advantage.

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Strategy Implementation

Strategy implementation

actions made by firms that carry out the

formulated strategy, including strategic controls,

organizational design, and leadership.

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