Chapter Three

Strategic Management :
Planning and Execution for
Competitive Advantage

Lecture Outline

MAJOR TOPICS
What is Strategic Management?
Competitive Strategy
Strategic Planning Overview
Conducting the SWOT Analysis
Developing the Vision
Developing the Mission

What is strategic
management?
Strategy: an approach adopted by
organization to ensure successful
performance in the marketplace
Strategic management: is
management that bases all actions ,
activities , and decisions on what is
most likely - within an ethical
framework - to ensure successful
performance in marketplace

Strategic Categories
-

Cost / leadership Strategies :

strategies in this category seek to
improve efficiency and control costs
throughout an organizations activity cost chain .
- Differentiation Strategies :
strategies in this category seek to add
value as defined by customers to the
organizations product or service
- Market-niche Strategies : strategies
in this category focus on a narrowly
defined segment of the market

Competitive strategy
To survive in a globally
competitive marketplace ,
organizations must adopt a
broad strategy that gives
them a sustainable
competitive advantage

Components of Strategic
Management
Strategic planning:
Who are we
Where are we going
How will we get there
What are our strengths and
weaknesses
Strategic execution:
The implementation phase

Strategic planning
Involves developing a written plan that has the
following components :
An organization vision (like a dream of what it wants
to became)
An organization mission (describes who an
organization is, what it does, and where it is
going)
Guiding principles (framework within which it will
pursue its mission.)
Broad strategic objectives (translate its mission into
more specific terms
Specific tactics
projects or activities for achieving the broad
objectives .

Strategic Execution
Involves implementing strategies
set forth in:
Strategic planning,
Monitoring progress toward
their achievement,
Adjusting as necessary

Swot analysis
(environmental
assessment)

Step 1

Develop the vision

Step 2

Develop the mission

Step 3

Develop the guiding

principles

Step 4

Develop the broad

strategic objectives

Step 5

Develop the specific

tactics
( action plan )

Step 6

The strategic planning process

Conducting the SWOT

Analysis 1/2
Identifying organizational
strengths : is any characteristic or
capability that gives the organization
a competitive advantage
Identifying organizational
weaknesses: is any characteristic or
capability that is lacking to the extent
that it puts the organization at a
competitive disadvantage

Conducting the swot

analysis 2/2
Identifying external opportunities :
external opportunities are opportunities in
the organizations business environment
that represent potential avenues for
growth and gaining a sustainable
competitive advantage .
Identifying external threats: an external
threat is a phenomenon in an organizations
business environment that has the
potential to put the organization at a
competitive disadvantage

Developing the vision

Sets the
tone for
Non
employees
concerned
with numbers
Creates unity of
purpose

Lofty , yet
Tangible
Challenging
, yet
Briefattainable
,but
comprehensiv
e
Easily
Understood

Characteristics of a well-crafted
vision statement

Visions
Caterpillar : Be the global leader in
customer value.
Ford : Democratize the automobile
Honda : To Be a Company that Our
Shareholders, Customers and Society
Want
Pfizer: We will become the world's most
valued company to patients, customers,
colleagues, investors, business partners,
and the communities where we work and
live

Developing the mission

Apply the following rules when developing it :
Describe the who , what , and where of the
organization, making sure the who
component describes the organization
and its customers .
Be brief , but comprehensive
Choose wording that is simple , easy to
understand , and descriptive .
Avoid how statements . How the mission will
be accomplished is described in the
strategies section of the strategic plan .

Mission Statements
McDonald's Mission Statement: McDonald's
mission is to be the world's best quick service
restaurant experience. Being the best means
providing outstanding quality, service,
cleanliness, and value, so that we make every
customer in every restaurant smile
DELLs Mission Statement: "To be the most
successful computer company in the world at
delivering the best customer experience in
markets we serve."

Developing the guiding

principles
An organizations guiding
principles establish the
framework within which
it will pursue its mission
. Each guiding principle
encompasses an important
organizational value .

Show what
the
organization
wants to
accomplish

In accordance

Broadly
stated

Characteristic
s of broad
strategic
objectives

with the
guiding
principles

Specific
enough to
be
measured

Single issue
focus

Tied directly
to the
vision/missio
n

Characteristics of a well-written broad strategic

objectives

Assemble input
Find optimum input
(analysis)
Resolve differences
Finalize objectives
(unwritten)
Publish objectives
(written)

Steps in writing broad strategic objectives

Any Questions

HOME WORK NUMBER 2

Give examples from the global

market about their Missions and
Visions , then discuss their strengths
and weaknesses from your point of
view .