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May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Every company is concerned with strategy
It determines which organizations succeed
and which ones struggle
Strategic blunders can hurt a company

 Strategic management is a specific type of

planning

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 The long-term view of the organization and
competition

 Thinking strategically impacts performance

and financial success

 Today’s environment requires everyone to

think strategically

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Decisions and actions used to formulate and
execute strategies that will provide
competitively superior fit between the
organization and its environment to achieve
organizational goals

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 Explicit strategy is the plan of action

 Competitive advantage is the organization’s

distinctive edge for meeting customer needs

Strategies should:
Exploit Core Competencies
Achieve Synergy
Create Value
Target Customers
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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Formulation:
Execution:
Assessing the
the use of managerial
external
and organizational
environment and
tools to direct
internal problems to
resources toward
create goals and
accomplishing
strategy
strategic results

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 Formulating strategy often begins with an
audit of internal and external factors
Internal Strengths and Weaknesses
External Opportunities and Threats

 Information is acquired from reports,

surveys, discussions, and meetings

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Strategic Business Units (SBUs) have a
unique mission, products, and competitors

 Portfolio strategy pertains to the mix of SBUs

and product lines to provide synergy and
competitive advantage

 Organizations should not become too

dependent on one business

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 Organizes business along two dimensions
Business growth rate
Market share

 Four categories for corporate portfolio

The combination of high/low market share
and high/low business growth

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 Related diversification: expansion into
new business related to existing business
activities

Unrelated diversification: expansion into

new lines of business

Vertical integration: expansion into

businesses that supply to the business or
are distributors

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 Strategy within the business units: How do
we compete?
 Business-level strategies are developed by
Porter’s Five Forces
 Web technology is impacting all industries
in positive and negative ways

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 Differentiation
Distinguishing products and services
 Cost Leadership
Cost reductions, cost controls
 Focus Strategy
Concentration on a specific region or
buyer
Either differentiation or cost leadership
approach
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Action plans used by major departments
Marketing
Production
Finance
Human Resources
Research and Development

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 The final step!
 “Strategy is easy, but execution is hard”
Most important but most difficult part
 Strategy must be skillfully executed
 Alignment requires all aspects of the
organization to focus on strategy goals
Everyone is moving in the same direction

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© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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