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David PPT Abbrev Ch01-1a

This document provides an overview of strategic management concepts. It defines strategic management as the art and science of formulating, implementing, and evaluating cross-functional decisions to achieve organizational objectives. The key steps in strategic management are strategy formulation including developing a vision, identifying opportunities and threats, assessing strengths and weaknesses, and selecting strategies, as well as strategy implementation and evaluation. Achieving sustained competitive advantage requires adapting to external changes and effectively carrying out strategic management processes.

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Salman Sead
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48 views17 pages

David PPT Abbrev Ch01-1a

This document provides an overview of strategic management concepts. It defines strategic management as the art and science of formulating, implementing, and evaluating cross-functional decisions to achieve organizational objectives. The key steps in strategic management are strategy formulation including developing a vision, identifying opportunities and threats, assessing strengths and weaknesses, and selecting strategies, as well as strategy implementation and evaluation. Achieving sustained competitive advantage requires adapting to external changes and effectively carrying out strategic management processes.

Uploaded by

Salman Sead
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

Chapter 1

The Nature of Strategic Management

Strategic
Management:
Concepts & Cases
11th Edition
Fred David

Copyright 2007 Prentice Hall Ch 1 - 1


Strategic Management –
Defined

Art & science of formulating,


implementing, and evaluating,
cross-functional decisions that
enable an organization to achieve
its objectives

Copyright 2007 Prentice Hall Ch 1 - 2


Strategy Formulation

Vision & Mission

External Opportunities & Threats

Internal Strengths & Weaknesses

Long-Term Objectives

Alternative Strategies

Strategy Selection

Copyright 2007 Prentice Hall Ch 1 - 3


Strategy Implementation

Annual Objectives

Policies

Employee Motivation

Resource Allocation

Copyright 2007 Prentice Hall Ch 1 - 4


Strategy Evaluation

Internal Review

External Review

Performance Metrics

Corrective Actions

Copyright 2007 Prentice Hall Ch 1 - 5


Achieving Sustained
Competitive Advantage

1. Adapting to change in external trends,


internal capabilities and resources

2. Effectively formulating, implementing &


evaluating strategies

Copyright 2007 Prentice Hall Ch 1 - 6


Adapting to Change – Key
Strategic Management
Questions
• What kind of business should we
become?
• Are we in the right fields?
• Are there new competitors
• What strategies should we
pursue?
• How are our customers
changing?

Copyright 2007 Prentice Hall Ch 1 - 7


Key Terms

Vision Statement –
What do we want to become?

Mission Statement –
What is our business?

Copyright 2007 Prentice Hall Ch 1 - 8


Key Terms

Opportunities & Threats (External)


Analysis of Trends:
• Economic
• Social
• Cultural
• Demographic/Environmental
• Political, Legal, Governmental
• Technological
• Competitors

Copyright 2007 Prentice Hall Ch 1 - 9


Key Terms

Strengths & Weaknesses (Internal)

Typically located in functional areas of the firm


• Management
• Marketing
• Finance/Accounting
• Production/Operations
• Research & Development
• Computer Information Systems

Copyright 2007 Prentice Hall Ch 1 - 10


Key Terms

Strategies

Means by which long-term objectives are


achieved

Copyright 2007 Prentice Hall Ch 1 - 11


Comprehensive Strategic Management Model
External
Audit

Chapter 3

Long-Term Generate, Implement Implement Measure &


Vision
Objectives Evaluate, Strategies: Strategies: Evaluate
&
Select Mgmt Issues Marketing, Performance
Mission
Strategies Fin/Acct,
R&D, CIS
Chapter 2 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9

Internal
Audit

Chapter 4

Copyright 2007 Prentice Hall Ch 1 - 12


Benefits of Strategic
Management

Financial Benefits

• Improvement in sales
• Improvement in profitability
• Productivity improvement

Copyright 2007 Prentice Hall Ch 1 - 13


Benefits of Strategic
Management

Non-Financial Benefits

• Improved understanding of competitors strategies


• Enhanced awareness of threats
• Reduced resistance to change
• Enhanced problem-prevention capabilities

Copyright 2007 Prentice Hall Ch 1 - 14


Business Ethics & Strategic
Management

Code of Business Ethics –

Provides basis on which policies can be


devised to guide daily behavior and
decisions in the workplace

Copyright 2007 Prentice Hall Ch 1 - 15


Advantages of International
Operations

Absorb excess capacity


Reduce unit costs
Spread risk over wider markets
Low-cost production facilities

Copyright 2007 Prentice Hall Ch 1 - 16


Disadvantages of International
Operations

Difficult communications
Underestimate foreign competition
Cultural barriers to effective management
Complications arising from currency
differences

Copyright 2007 Prentice Hall Ch 1 - 17

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