1. Strategic Planning
and Strategic Management
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2. Strategic Management
•• Top management’s responsibility.
Top management’s responsibility.
•• Defines the firm’s position.
Defines the firm’s position.
•• Formulates strategies.
Formulates strategies.
•• Guides the execution of long-term organizational
Guides the execution of long-term organizational
functions.
functions.
•• Helps position the organization to achieve a superior
Helps position the organization to achieve a superior
competitive fit.
competitive fit.
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3. Strategic Planning Questions
What is the organization’s
position in the marketplace?
What does the organization want
its position to be?
What trends and changes are
occurring in the marketplace?
What are the best alternatives to
help the organization achieve its
goals?
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4. Four Elements of
Strategy Development
2. Resource
1. Scope Deployment
3. Distinctive
Competitive 4. Synergy
Advantage
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5. Scope of a Strategy Specifies
• The position or size the firm wants to achieve.
• The geographical markets it wants to compete in.
• The products and services it will sell.
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6. Distinctive Competitive Advantage
—Four Points —
1. Unique position in relationship to its competition
2. A firm’s core competencies
3. What the firm knows best
4. What the firm does best
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7. Characteristics of
Successful Strategic Managers
• Well informed
• Skill at focusing their time and energy
• Good at building consensus
• Good at creating contingency plans
• Accomplished at simplifying the process
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8. Strategy Formulation
Planning and decision making that goes into developing
the company’s strategic goals.
Includes:
– Assessing the environments.
– Analyzing core competencies.
– Creating goals and plans.
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9. Strategy Implementation:
Executing the Strategic Plan Includes
Creating Teams Adapting New Technologies
Focusing on Processes
Facilitating Communications
Rather than Functions
Offering Incentives Making Structural Changes
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10. The Purpose of Corporate-Level
Strategy to Answer
1. What business are we in?
2. What business should we be in?
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11. Business-Level Strategy Questions
1. How do we compete?
2. How much will be spent on activities
such as advertising and R & D?
3. What equipment and facilities will
be needed?
4. Should we expand or contract
existing product lines?
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12. Functional-Level Strategy
Major Activities
Human Resource Management
Research and Development
Marketing
Finance
Production
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13. Strategic Planners Should Consider
The Following
 Management Factors
 Management Factors
 Marketing Factors
 Marketing Factors
 Production Factors
 Production Factors
 Research Factors
 Research Factors
 Human Resource Factors
 Human Resource Factors
 Financial Factors
 Financial Factors
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14. SWOT Analysis Chart
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15. SWOT Analysis Chart
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16. External Threats and
Opportunities Factors
The threat or opportunity:
• of new competitors entering the marketplace.
• of substitute products.
• resulting from entering new marketplaces.
• created by strategy changes of major competitors.
• resulting from the potential actions and profitability of customers.
• created by the actions of suppliers.
• resulting from new (or abandoned) government regulations.
• created by new technology.
• from changes in the state of the economy.
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17. Craig Weatherup’s
Three Leadership Criteria
• Idea leadership “the ability to find, create, borrow,
steal, or reshape ideas, especially big ideas.”
• People leaders “to mobilize the troops and energize
the organization.”
• Capability leadership refers to “a manager’s ability
to build and institutionalize the capabilities of
people.”
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18. Five Basic Grand Strategies
1. Growth Strategy – is adopted when the organization wants to
1. Growth Strategy – is adopted when the organization wants to
create high levels of growth in one or more of its areas of
create high levels of growth in one or more of its areas of
operations.
operations.
2. Integration Strategy – is adopted with the business sees a need
2. Integration Strategy – is adopted with the business sees a need
•• to subsidize its supply lines or reduce costs.
to subsidize its supply lines or reduce costs.
•• to consolidate competition.
to consolidate competition.
3. Diversification Strategy – the company wants to move into new
3. Diversification Strategy – the company wants to move into new
products or markets.
products or markets.
4. Retrenchment Strategy – used to reduce the size or scope of aa
4. Retrenchment Strategy – used to reduce the size or scope of
firm’s activities by cutting back or eliminating entire businesses.
firm’s activities by cutting back or eliminating entire businesses.
5. Stability Strategy – the organization wants to remain the same.
5. Stability Strategy – the organization wants to remain the same.
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19. Integration Strategies
• Vertical Integration
– Gaining ownership of resources, suppliers, or
distribution systems that relate to a company’s
business.
• Horizontal Integration
– A strategy to consolidate competition by
acquiring similar products or services.
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20. Portfolio Strategy
Determines the mix of business units and product lines.
Begins by identifying strategic business units (SBUs).
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21. SBUs
 Autonomous businesses with their own identities.
 Operate within the framework of the organization.
 Originated at General Electric in the 1970s.
 Have their own product lines, markets, and
competitors.
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22. A BCG Matrix
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23. Business-Level Strategy
 Strategy managers formulate for each SBU.
 Strategies that can be grouped as either adaptive
strategies or competitive strategies.
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24. The Four Adaptive Strategies
1. Prospector
2. Defender
3. Analyzer
4. Reactor
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25. Marketing Strategy Involves
Pricing
Promotion
Distribution
Product or service mix of the
organization
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