Corporate Strategy or Strategic Management
Concepts and Cases by Fred R. David,
Francis Marion University, Florence, South Carolina, &
Forest R. David,
Strategic Planning Consultant
4. 1. A Church
2. A Hospital
3. Pakistan Cricket Board
4. An NGO
5. IBM
6. Iqra university
7. A Political Party
Which of the following is not an example of
an organization?
5. 1. social entities that
2. are goal directed
3. are designed as deliberately
structured & coordinated system,
4. are linked to the external environment
Organizations are
6. The key element in an organization is not a building or a set
of policies & procedures.
Organizations are made of people and their
relationship with one another.
An organization exists when people interact with one
another to perform essential functions that help attain goals.
7. 1. Bring together resources to activate desired goals & outcomes
2. Produce goods/services efficiently
3. Facilitate innovation
4. Use technology
5. Adapt to and influence a changing environment
6. Create values for stakeholders
7. Accommodate ongoing challenges of diversity, ethics,
motivation & coordination of employees
8. The word ‘strategy’, deriving from the Greek noun
strategus, meaning ‘commander in chief’, was first used in
the English language in 1656.
The development and usage of the word suggests that it
is composed of stratos (army) and agein (to lead).
In a management context, the word ‘strategy’ has now
replaced the more traditional term – ‘long-term planning’ –
to denote a specific pattern of decisions and actions
A strategy is a course of action.
9. 1. Strategic or institutional management is the conduct of drafting,
implementing and evaluating cross-functional decision making that
will enable an organization to achieve its long-term objectives.
2. It is the process of specifying the organization's mission, vision and
objectives, developing policies and plans, often in terms of projects
and programs, which are designed to achieve these objectives, and
then allocating resources to implement the policies and plans, projects
and programs.
3. Art and science of formulating, implementing, and evaluating cross-
functional decisions that enable an organization to achieve its
objectives.
10. Strategic management is an ongoing process that evaluates
and controls the business and the industries in which the
company is involved;
assesses its competitors and sets goals and strategies to meet
all existing and potential competitors;
and then reassesses each strategy annually or quarterly [i.e.
regularly] to determine how it has been implemented and
whether it has succeeded or needs replacement by a new
strategy to meet changed circumstances, new technology,
new competitors, a new economic environment., or a new
social, financial, or political environment.”
11. Brief History of Strategic Management
1950s - Term strategic planning originates
1960s – 1970s - Strategic planning very popular
- Widely viewed as answer to all problems
1980s - Strategic planning cast aside
- Planning models did not yield higher returns
1990s–2000 - Revival of strategic planning
- Widely practiced in business world
12. Culture
Why are we in business ?
Values
Climate
Mission
Vision
Driving Force
How do we do business ?
How will we know we’ve arrived ?
How can we get there ?
Where do we want to be ?
Where are we now ? SWOT
OCA
Goals/Obj
.
Resources
Tactics
Strategies
Gap Analysis
Coordination Budgets MilestonesReportsControls
Strategic Management
14. Step 1: Define the Business and Its Mission
Step 2: Perform External and Internal Audits
Step 3: Translate the Mission into Strategic Goals
Step 4: Formulate a Strategy to Achieve the Strategic Goals
Step 5: Implement the Strategy
Step 6: Evaluate Performance
15. CEO, Top
Management
Team
External Environment
Opportunities
Threats
Uncertainty
Resource Availability
Internal Situation
Strengths
Weaknesses
Distinctive Competence
Leadership Style
Past Performance
Strategic Direction
Organization
Design
Effectiveness
Outcomes
Define
mission,
official
goals
Select
operational
goals,
competitive
strategies
Resources
Efficiency
Goal attainment
Competing values
Structural Form –
learning vs.
efficiency
Information and
control systems
Production
technology
Human resource
policies,
incentives
Organizational
culture
Interorganizational
linkages
21. Answers the question: “What do we want to become?”
1. First step in strategic planning
2. Often times a single sentence
“Our vision is to take care of your vision.”
(Stokes Eye Clinic, Florence, South Carolina)
23. • SWOT analysis is a basic, straightforward model
that provides direction and serves as a basis for
the development of strategic plans.
• It accomplishes this by assessing an organizations
Strengths (what an organization can do) and
Weaknesses (what an organization cannot do) in addition to
Opportunities (potential favorable conditions for an organization) &
Threats (potential unfavorable conditions for an organization).
24. PESTLE is an acronym for
Political
Economic
Social
Technological
Legal and
Environmental factors
• Cultural
• Demographic
• Governmental
• Competitive trends & events
25. Controllable activities that are performed well or poorly relative to
competitors
- Based on functional analysis of activities in the firm’s:
• Management
• Marketing
• Finance/accounting
• Production/operations
• Research and development
• Computer information systems
Organizations strive to pursue strategies that capitalize on strengths
and improve weaknesses
26. 1. Goals are broad objectives are narrow.
2. Goals are general intentions; objectives are precise.
3. Goals are intangible; objectives are tangible.
4. Goals are abstract; objectives are concrete.
5. Goals can't be validated as is; objectives can be validated
27. SMARTS Way to Write Objectives
Specific
Measurable
Achievable
Realistic
Time Bound
Stretched.
28. Results to be achieved in pursuing the organization’s mission.
Time frame is beyond one year.
• State direction
• Aid in evaluation
• Create synergy
• Reveal priorities
• Focus coordination
• Provide basis for effective management
29. Potential actions that require top management decisions and large
amounts of firm’s resources
Mechanisms by which long-term objectives are realized
• Geographic expansion
• Diversification
• Acquisition
• Product development
• Market penetration
• Retrenchment
• Divestiture
• Liquidation
• Joint venture
30. Corporate-level strategy
– Identifies the portfolio of businesses that, in total, comprise the company and the ways in
which these businesses relate to each other.
• Diversification strategy implies that the firm will expand by adding new product lines.
• Vertical integration strategy means the firm expands by, perhaps, producing its own raw
materials, or selling its products direct.
• Consolidation strategy reduces the company’s size
• Geographic expansion strategy takes the company abroad.
Business-level/competitive strategy
Identifies how to build and strengthen the business’s long-term competitive position in the
marketplace.
• Cost leadership: the enterprise aims to become the low-cost leader in an industry.
• Differentiation: a firm seeks to be unique in its industry along dimensions that are widely
valued by buyers.
• Focus: a firm seeks to carve out a market niche, and compete by providing a product or
service customers can get in no other way.
31. Company Strategic Principle
Dell Be direct
General Electric Be number one or number two in every industry in which we
compete, or get out
Southwest Airlines Meet customers’ short-haul travel needs at fares competitive
with the cost of automobile travel
Wal-Mart Low prices, every day
S T R A T E G I E S I N B R I E F
32. Short-term milestones necessary to achieve long-term
objectives.
• Represent the basis for allocating resources
• Established at corporate, divisional, and functional levels
33. Important in strategy implementation as the means
by which annual objectives will be achieved
• Guide to decision making and address repetitive situations
• Established at corporate, divisional, or functional levels
• Allow consistency & coordination within and between
organizational departments
34. Vision Skills Incentives Resources Action Plan
Skills Incentives Resources Action Plan
Vision Incentives Resources Action Plan
Vision Skills Resources Action Plan
Vision Skills Incentives Action Plan
Vision Skills Incentives Resources
35. • Proactive vs. Reactive
• Principal Benefit
- Formulate better strategies (Systematic, logical, and rational approach)
• Communication (Key to successful strategic management)
• Financial Benefits
- More profitable and successful
- Improvements in sales, profitability, and productivity
• Nonfinancial Benefits
- Enhanced awareness of external threats
- Understanding of competitors’ strategies
- Increased employee productivity
- Reduced resistance to change
- Clear performance-reward relationships
- Order and discipline to the firm
- View change as opportunity
36. • Poor reward structures
• Fire-fighting
• Waste of time
• Too expensive
• Laziness
• Content with success
• Fear of failure
• Overconfidence
• Prior bad experience
• Self-interest
• Fear of the unknown
• Suspicion