Strategic Management is the core course in MBA according to HEC recommended syllabus in Minhaj University, Lahore. and other HEC recognized Universities.
2. Strategic Management
The art and science of formulating, implementing and evaluating cross functional decisions that enable an organization to achieve its objective. (Fred R. David)
The Term “Strategic Management” is used in Business world and “Strategic Planning” is used in Academia
3. What is Strategic Management?
Application of the basic planning process at the highest levels of the company
Top management sets goals for the performance of the company
Carefully formulating, implementing, and evaluating plans and strategies
4. What is Strategic Management?
Most important part is developing strategic plans
Plans must remain current as changes occur inside and outside the company
Involves many levels of management
Top level formally develops basic plans
Different departments may be asked to develop plans for their own areas
A solid plan guarantees that plans are coordinated and are supported by everyone in the company
5. Strategic Management Approach
Three phases critical to the success of the process
Formulation
Developing the strategic plan
Implementation
Putting the formulated plan to work
Evaluation
Continuously evaluating and updating the strategic plan
6.
7. Formulating Strategy
Developing the grand-and business-level strategies to be used by the company
Company’s strengths/weaknesses and threats/opportunities shape the strategies
First step is to understand the current position of the company
Identify mission, identify past and present strategies, diagnose the company’s past and present performance, set objectives for the company’s operation
8. Formulating Strategy
Identify the mission statement
Outlines why the company exists
Describes the company’s basic products and/or services and defines markets and sources of revenue
Designed to accomplish several goals and ensures a common purpose within the company
9. Apple’s Mission Statement
Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award- winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market this year with its revolutionary iPhone.
10. Who’s Mission Statements?
1."To bring inspiration and innovation to every athlete in the world."
2."To enable people and businesses throughout the world to realize their full potential."
3.“. . .seeks to be the world’s most customer-centric company, where customers can find and discover anything they may want to buy online at a great price."
11. Identifying Past and Present Strategies
Companies need to understand and appreciate their corporate history
Strategic managers should ask
Has past strategy been developed?
If not, can past history of the company be analyzed to identify the strategy that has evolved?
If yes, has the strategy been recorded in writing?
12. Diagnosing Past and Present Performance
A corporate planner must decide if past strategies worked and if strategic changes are needed by asking:
How is the company currently performing?
How has it performed during the past few years?
Is the performance trend moving up or down?
13. Setting Goals
Concise statements that provide direction employees and set standards for achieving the company’s strategic plan
Established in many areas (see handout)
Goals must be reevaluated as the environment and opportunities change
Multiple goals are used to reflect the desired performance
14. Policies, Procedures, and Rules
Policiesare broad general guides to action that establish boundaries within which employees must operate
“answering all written customer complaints in writing within 10 days”
15. Policies, Procedures, and Rules
Proceduresare detailed series of related steps/tasks written to implement a policy
Define methods through which policies are achieved
“the customer service representative must note the complaint of Form 622 and forward the yellow copy of the form…”
Rulesdetail specific and definite corporate actions that employees must follow
Leave little doubt about what is to be done
“no smoking in the conference room”
16. SWOT Analysis
Strengths, Weaknesses, Opportunities, Threats
Process that allows companies to evaluate overall health
Internal (SW) and external (OT)
Most important result of a SWOT analysis is the ability to draw conclusions about the attractiveness of the company’s situation and the need for strategic action
17. SWOT
Strengths
Convenience
Customer service
Location
Pricing
Weaknesses
Time/cost
Employee training
Limited expansion
Competition
18. SWOT
Opportunities
Open more locations
Re-evaluate operations
Evaluate technological advances
Threats
Competition-low barriers to entry, many other shops around
Small company-difficult to compete with large companies
Small profit margins
19. Implementing Strategy
Action stage of strategic management
Managers determine and implement the most appropriate company structure, motivate employees, develop short-range goals, and establish functional strategies
Strategy must fit with current company policies
Or conflicting policies must be changed
A. T. Cross Company
20. Strategies
Strong marketing and advertising
Hire, train and motivate employees to provide exceptional service
Willingness to be flexible
Purchase only the best products
Capture market share by gaining customer loyalty
21. Evaluating and Controlling the Strategic Plan
Process of continuously monitoring the company’s progress toward its long- range goals and mission
Managers should ask:
Does the grand strategy need revising?
Where are problems likely to occur?
Basic strategy evaluation strategies:
Review external and internal factors that are the bases for current strategies
Measure performance
Take corrective action
22. Evaluating and Controlling the Strategic Plan
Emphasis is making the company’s managers aware of the problems that are likely to occur and of the actions to take if they do arise
Plan ahead and avoid disaster
Strategic planning and evaluation should be done on a predetermined schedule and as frequently as necessary, determined by internal and environmental factors
23. Evaluation Points
Financial evaluation
Product evaluation
Employee evaluations
Customer surveys
Compare performance with similar sized pizza shops