Strategic

Management
Introduction
What is strategic
management?
 Strategic Management 40 C

B A

Org

3
 Strategic Management
1. Management is a goal-oriented process
(VMOSA)
2. Organizations should acquire resources
a. Tangible resources.

b. Intangible resources.

3. Organizations work in an environment:

a. Internal environment

b. External environment.

4. Efficiency and Effectiveness.

 Socio-Techno Systems (STS)
Social/Technological Systems

The technical The human

side of the side of the
organization organization
 (4) Efficiency and Effectiveness

• Effectiveness: Do the right things

 Efficiency vs. Effectiveness (Video)

introduction 7
8
introduction
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introduction
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introduction

(1) (2)
Low efficiency Low efficiency
Low High
effectiveness effectiveness

(4)
(3)
High
High efficiency
efficiency
Low
High
effectiveness
effectiveness
Strategic Management
Introduction Video
Strategic Management
15
introduction
Strategic Thinking

1. A vision without a strategy remains an illusion.” Lee

Bolman.
2. “ The essence of strategy is choosing what not to
do.” Michael Porter.
3. “ You cannot be everything to everyone.
4. “ Strategy without process is little more than a wish
list.” Robert Filek.
5. “ Hope is not a strategy.” Vince Lombardi.
n
Strategic Management: Introduction video
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introduction

Strategic management
IS ABOUT
CREATING AND ENHANCING ORAGNIZATIONS’ SUSTAINABLE
COMPETITIVE ADVNATAGE
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introduction
Cirque Du Solei
 Strategic Positioning

• Strategic positioning attempts to achieve sustainable competitive

advantage by preserving what is distinctive about a company.

• It means performing different activities from rivals or performing

similar activities in different ways.

• Strategy is the creation of a unique and valuable position, involving a

different set of activities.

• Strategy involves creating “fit” among a company’s activities

 Rivals can easily copy your
improvements in quality and
efficiency.
But
they shouldn’t be able to copy your
strategic positioning— what
distinguishes your company from all
the rest
21

Strategic Management Assumptions

 SM Underlying Assumptions

1 2
Competition Create future

Plan or be planned for No plans = No future

3 4 5
Be different Value proposition No good old days
1. Rare Good old days
2. Hard to imitate Value creation are not sufficient
3. No substitutes to ensure future
success
(1) Competition (Plan or be planned for)

● The prime goal for all types of organizations is

to increase their market shares.
● Market share = (Company sales / Industry
sales) x 100
● Zero-sum game is the name of the game
(increases = decreases).
● Market dynamics.
● Change is the only constant.
● Business is a war.
Automotive Industry
Samsung market share
26
introduction

● In the year 1973, the 'Big Three' car makers in

the USA had over 82% of the market share.
Today they have less than 50%. The main
reason for this, is the aggressive (and
unexpected) entry of Japanese car makers, led (1) Plan or be Planned for
by Toyota into the US market in the 1970's.

C A
B
Market Share
(2) Create Future: (No planning is planning for failure)

● Planning is creating the desired future.

● No planning = no future
● If you think planning is expensive, try no planning.
● If you plan to change nothing, nothing will change.
● Example: Nokia
 ‫‪Creating the smart future‬‬

‫"باألمس كنت ذكيا‪ ،‬فأردت أن أغري العامل‪ .‬اليوم أنا‬

‫حكيم‪ ،‬و لذلك أغري نفسي"‬
(2) Create Future: (Planning vs. Plans)

● Sometimes planning is more important than plans.

● “In preparing for battle I have always found that

plans are useless, but planning is indispensable.”
Dwight D. Eisenhower

● Planning is a continuous process.

● Plans are the outcomes of the planning process.
● Systematic way of strategic thinking is the most
important issue.
(3) Be different (Sustainable Competitive Advantage)
● Competitive advantage refers to factors that allow a
company to produce goods or services better or
more cheaply than its rivals.
● These factors allow the productive entity to generate
more sales or superior margins compared to its
market rivals.
● Competitive advantages are attributed to a variety of
factors including:
● cost structure,
● branding
● the quality of product offerings,
● the distribution network
● intellectual property, and
● customer service.
(4) Value proposition
● Value proposition is a statement that describes a company or
product’s value to the customer.
● It answers the question “Why should the customer buy our
product or service?”
● It includes an explanation of the benefits the customer will
receive and why the company is the best choice for them.
● The value proposition in marketing can basically be a feature,
service, or innovation that makes the company or product
attractive to its customers.
● Example: (Uber): Uber's value proposition is called 'Uber
Convenience' which the company explains as the smartest way to
get around. It is one-tap, predictable, and cashless.
(5) No good old days

● Good old days are not sufficient to secure future success

(Vision and mission.
● Yesterday is history, tomorrow is a mystery, and today is a
gift.
● Strategic practices that were once useful may cause a
failure in the future.
● Organizations must have a clear vision and a clear
mission.
 Strategic
Management
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introduction
VIDEO (1) INTRODUCTION
35

REMEMBER
Strategic Management

(The art of creating the desired Future)

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introduction

Strategic Management

It is all about enhancing the organizational

Competitive Advantage
Prime Task of Strategic Management

Think through the overall mission of a business.

Ask the key question:
“What is our Business?”
Peter Drucker
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introduction

REMEMBER
OUT

● The essence of strategy is choosing what not to

“

do.” Michael Porter

● “Planning is bringing the future into the present so that you

can do something about it now.”

IN
Lakein, Alan, American Time Management Expert Author

Trainer
 Strategies

Means by which long-term objectives are achieved

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introduction
Do we need a strategy?
 Strategic Management definition

Strategic management is the art & science of formulating,

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

Strategic Management is that set of managerial decisions and

actions that determines the long-run performance of a
corporation (Wheelen and Hunger).

3. It includes four stages:

• Environmental scanning.
• Strategy formulation.
• Strategy implementation.
• Strategy evaluation and control.
 Strategic Management definition
1. Strategic management is the ongoing planning,
monitoring, analysis, and assessment of all necessities an
organization needs to meet its goals and objectives. Changes
in business environments will require organizations to
constantly assess their strategies for success.

2. Develop a powerful, value-based strategy to achieve greater

success for your team and organization.

3. Strategic management involves setting objectives,

analyzing the competitive environment, analyzing the
internal organization, evaluating strategies, and ensuring
that management rolls out the strategies across the
organization
 Strategic Management stages and questions
• Where are we now?
1. Scanning 1 • Internal assessment and external assessment.

• Where do we want to go?

2. 2 • VMOSA
Formulation
• How can we go there?
3. Executing 3 • Strategy execution (Structure, SOP, Leadership, engagement, change
management, ….)
• Are we there?
4. Monitoring 4 • Strategy success
• KPI’s
 Tips to Achieve strategic Success

▪ Assess ▪ Master
Assess business opportunities through the lens
of value creation Master the language and tools of business
strategy to contribute meaningfully to
strategic conversations and your team’s
success
▪ Apply ▪ Create
Apply the value stick, a research-based framework Create value for customers, employees, and
for strategy formulation, to key strategic decisions suppliers, often in surprising ways, that rival
that companies face today companies will find hard to match

▪ Develop ▪ Build

Develop a strategic innovation toolkit and learn Build sustainable success with the help of
when and how to apply design thinking and complements and network effects
innovative problem-solving tools and exercises
(4) Value proposition
● Value proposition is a statement that describes a company or
product’s value to the customer.
● It answers the question “Why should the customer buy our
product or service?”
● It includes an explanation of the benefits the customer will
receive and why the company is the best choice for them.
● The value proposition in marketing can basically be a feature,
service, or innovation that makes the company or product
attractive to its customers.
● Example: (Uber): Uber's value proposition is called 'Uber
Convenience' which the company explains as the smartest way to
get around. It is one-tap, predictable, and cashless.
(1) It takes into account the external environment in which the organization
operates

• Strategic planning relies largely on the results of an

external analysis of the environment in which an
organization operates and which the organization has
very little influence over.
• Different environmental factors, such as demographic
trends, macroeconomic situations, political trends,
social tendencies, etc., may have a decisive impact
on the organization’s results.