Managing Strategy

What do we learn?

a.     What is strategic management and why its important.

Ø  What is strategic management?

·         What managers do to develop the organization’s strategies (plans for how the organizations will do what its in business to do, how it will compete successfully, and how it will attract and satisfy its customers in order to achieve goals.

·         Business model: how the company is going to make money.

Ø  Why strategic management is important?

·         results in higher organizational performance.

·         coordinates diverse organizational units, helping them focus on organizational goals.

b.    Six steps of the strategic management process.

1.      Identify the organization’s current mission, goals, and strategy.

·         Mission: a statement of its purpose.

2.      External analysis.

·         What impact might the following trends have for business?

·         Opportunities: positive trend in the external environment.

·         Threats: negative trends.

3.      Internal analysis.

·         Provides important information about an organization’s specific resources and capabilities.

·         Resources: an organization’s assets that are used to develop, manufacture, and deliver products to its customers.

·         Capabilities; an organizational’s skills and abilities in doing the work activities needed in its business.

·         Core compentencies: the organization’s major value creating capabilities that determine its competitive weapons.

·         Strengths: activities that organizations does well or its unique resources.

·         Weaknesses: activities that organizations does no do well or resources it needs but does not possess.

·         SWOT analysis: to analysis the organization’s strengths, weaknesses, opportunities, and threats.

4.      Formulating strategies.

·         Consider the realities of the external environment and their available resources and capabilities in order to design strategies that will help an organization achieve its goals.

5.      Implementing strategies.

6.      Evaluating results.

c.      What is corporate strategies and the types.

Ø Corporate strategy: an organizational strategy that determines what business a company is in or wants to be in, and what it wants, to do with those businesses.

Ø 3 types of corporate strategies:

1.      Growth strategy: used when an organization wants to expand the number of markets served or products offered, either thorugh its current business(es) or thorugh new business(es).

2.      Stability strategy: organization continues to do what it is currently doing.

3.      Renewal strategy: designed to address decilining performance.

Ø How are corporate strategies managed?

·        BCG matrix: strategy tool that guides resource allocation decsions on the basis of market share and growth rate of SBUs.

·        4 categories:

1.      Stars: high market share? High anticipated growth rate.

2.      Cash cows: high market share/ low aniticpated growth rate.

3.      Question marks: low market share? High anticipated growth rate.

4.      Dogs: low market share/ low anticipated growth rate.

d.    Competitive advantage and strategies organizations use.

Ø  Competitive strategy: an organizational strategy for hw an organization will compete in its business(es) (single business that are independent and have their own competitive strategies reffered to strategic business units (SBUs).

Ø  Competitive advantage: what sets an organization apart, its distinctive edge.

Ø  5 forces model:

1.      Threats of new entrants.

2.      Threat of substitute.

3.      Bargaining power og buyers.

4.      Bargaining power of suppliers.

5.      Current rivalry.

Ø  Functional strategy: the strategy used by an organization’s various functional departments to support the competitive strategy.

e.      Solution for current issues of management strategy.

Ø  Strategic leadership:  the ability to anticipate, envision, maintain flexibility, think  strategically, and work with others in the organization to initiate changes that will create a viable and valuable future for the organization.

Ø  Flexibility: the ability to recognize major external changes, to quickly commit resources, and to recognize when a strategic decision was a mistake.