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Chapter 8 - Strategic Management

The document discusses strategic management and the strategic management process. It describes identifying an organization's mission and objectives, conducting external and internal analysis, formulating strategies, implementing strategies, and evaluating results. It also discusses types of organizational strategies including corporate, business, and functional strategies.

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Marielle Ace Gole Cruz
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24 views

Chapter 8 - Strategic Management

The document discusses strategic management and the strategic management process. It describes identifying an organization's mission and objectives, conducting external and internal analysis, formulating strategies, implementing strategies, and evaluating results. It also discusses types of organizational strategies including corporate, business, and functional strategies.

Uploaded by

Marielle Ace Gole Cruz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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STRATEGIC

MANAGEMENT
CHAPTER 8
STRATEGIC MANAGEMENT

• Is what managers do to develop the


organization’s strategies. Strategic
management involves all four of the basic
management functions—planning,
organizing, leading, and controlling.
STRATEGIC MANAGEMENT
PROCESS
• a six-step process that encompasses strategic
planning, implementation, and evaluation.
STRATEGIC MANAGEMENT
PROCESS
• Identifying the Organization’s Current Mission,
Objectives, and Strategies:
• Mission
• Statement of the purpose of an organization.
• The mission statement addresses the question:
• What is the organization’s reason for being in business?
STRATEGIC MANAGEMENT
PROCESS
• External Analysis:
• Managers in every organization need to conduct an external analysis.
• Influential factors such as:
• Competition
• Pending legislation
• Labor supply
• Opportunities
• are positive trends in external environmental factors
• Threats
• are negative trends in environmental factors
STRATEGIC MANAGEMENT
PROCESS
• Internal Analysis:
• Internal analysis should lead to a clear assessment of the organization’s
resources and capabilities.
• Strength
• Any activities the organization does well or any unique resources that it has.
• Weaknesses
• are activities the organization does not do well or resources it needs but does not
possess.
• SWOT analysis
• is an analysis of the organization’s strengths, weaknesses, opportunities, and
threats.
STRATEGIC MANAGEMENT
PROCESS
• Formulating Strategies:
• After the SWOT, managers develop and evaluate strategic
alternatives and select strategies that are appropriate.

• Strategies need to be established for corporate, business, and


functional levels.
STRATEGIC MANAGEMENT
PROCESS
• Implementing Strategies

• Evaluating Results
• to know how effective the strategies have been and if any
adjustments are necessary.
TYPES OF ORGANIZATIONAL
STRATEGIES
• Strategic planning takes place on three different and
distinct levels:
• Corporate
• Business
• Functional
CORPORATE STRATEGY
• It is an organizational strategy that determines what businesses a company is in, should be in,
or wants to be in, and what it wants to do with those businesses.
• There are three main types of corporate strategies:
• Growth strategy
• is a corporate strategy that is used when an organization wants to grow and
does so by expanding the number of products offered or markets served, either
through its current business) or through new businesses.
• Stability strategy
• is a corporate strategy characterized by an absence of significant change in
what the organization is currently doing.
• Renewal strategy
• is a corporate strategy designed to address organizational weaknesses that are
leading to performance declines. Two such strategies are retrenchment
strategy and turnaround strategy.
CORPORATE PORTFOLIO
ANALYSIS
Used when an organization’s corporate strategy involves a number of
businesses.
• Managers can manage this portfolio of businesses using a corporate
portfolio matrix, such as the BCG matrix.
• The BCG matrix
• is a strategy tool that guides resource allocation decisions on the basis of
market share and growth rate of Strategic Business Units (SBUs).
BUSINESS (COMPETITIVE)
STRATEGY
• Business strategy (also known as a competitive strategy)
an organizational strategy focused on how the organization will compete in each of its
businesses.

• Competitive advantage
• Is what sets an organization apart, that is, its distinctive edge.
• Can come from its core competencies.

• Quality
• can be one way for an organization to create a sustainable competitive
advantage.
PORTER'S FIVE FORCES
FRAMEWORK
• Method of analysing the operating
environment of a competition of a
business. It draws from
industrial organization (IO) economic
s
to derive five forces that determine
the competitive intensity and,
therefore, the attractiveness (or lack
thereof) of an industry in terms of its
profitability.
PORTER’S THREE GENERIC
COMPETITIVE STRATEGIES.
• Cost leadership strategy
is a business or competitive strategy in which the organization competes on the basis of having the
lowest costs in its industry.

• Differentiation strategy
is a business or competitive strategy in which a company offers unique products that are widely
valued by customers.

• Focus strategy
is a business or competitive strategy in which a company pursues a cost or differentiation
advantage in a narrow industry segment.
FUNCTIONAL STRATEGY

•These are strategies used by an


organization’s various functional
departments to support the business or
competitive strategy
NEW DIRECTIONS IN
ORGANIZATIONAL STRATEGIES
• E-Business Strategies.
• Using the Internet, companies have created knowledge bases that employees can
tap into anytime, anywhere. E-business as a strategy can be used to develop a
sustainable competitive advantage; it can also be used to establish a basis for
differentiation or focus.
• Customer Service Strategies
• These strategies give customers what they want, communicate effectively with
them, and provide employees with customer service training.
• Innovation Strategies
• These strategies focus on breakthrough products and can include the application
of existing technology to new uses.

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