Overview
Why do some firms succeed while others fail?
A central objective of strategic management is to
What is strategy?
An action a company takes to attain superior
performance.
Strategic Planning
Rational planning by top management?
Basic Strategic Planning Model
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
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FIGURE 1.1
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Major goals
Specify what the organization hopes
Secondary goals
Are objectives to be attained that lead to superior
performance.
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External Analysis
Identify strategic opportunities and threats in the operating environment.
Immediate (Industry)
Macroenvironment
National
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Internal Analysis
Identify strengths
Quality and quantity of resources available
Distinctive competencies
Identify weaknesses
Inadequate resources
Managerial and
organizational deficiencies
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Strategic Choice
Business Functional Global Corporate
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Business-Level Strategies
Cost leadership
Attaining, then using the lowest total cost basis as a
competitive advantage.
Differentiation
Using product features or services to distinguish the
Functional-Level Strategies
Focus is on improving the effectiveness of operations within a company.
Manufacturing Marketing
Materials management
Research and development Human resources
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Global-Level Strategies
Multidomestic International Global Transnational
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Corporate-Level Strategies
Vertical integration Diversification Strategic alliances Acquisitions New ventures Business portfolio restructuring
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Strategy Implementation
Designing organizational structure Designing control systems
Market and output controls Bureaucratic controls Control through organizational culture Rewards and incentives
Controls
Structure
Strategy
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Functional
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Strategic Managers
General managers
Responsible for the overall (strategic) performance
Operations managers
Responsible for specific business
functions or operations.
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FIGURE 1.2
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Strategic Leadership
Vision, eloquence, and consistency Commitment to the vision Being well informed Willingness to delegate and empower Astute use of power Emotional intelligence
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emergent strategies.
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FIGURE 1.3
Source: Reprinted from Strategy Formation in an Adhocracy, by Henry Mintzberg and Alexandra McGugh, published in Administrative Science Quarterly, Vol. 30, No. 2, June 1985, by permission of Administrative Science Quarterly.
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FIGURE 1.4
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FIGURE 1.5
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commitment to an action.
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FIGURE 1.6
Copyright 2001 Houghton Mifflin Company. All rights reserved. 1-24