Strategic Management complete course...

1. JahanUniversity
BachelorofBusinessAdministration
Departmentof BusinessAdministration
Subject: Strategic Management
Lecture# First
Lecturer: Hijratullah Tahir
1

2. Objectives of the lecture
After compellation of this lecture students will be able to know:
1. Define and Describe Strategic Management
2. Key Terms Regarding Strategic Management
3. Discuss nature of Strategy
• Formulation
• Implementation
• Evaluation
2

3. Outline of the lecture
Topic 1: What is Strategic Management?
Topic 2: Stages of Strategic Management
Topic 3: Key terms in Strategic Management
Topic 4: Strategic Management Model
Topic 5: Benefits of Strategic Management
Topic 6: Why some firms don’t implement Strategic Planning?
Topic 7: Pitfalls in Strategic Planning
3

4. Story about Strategic Management
Once there were two company presidents who competed in the same industry. These
two presidents decided to go on a camping trip to discuss a possible merger. They hiked
deep into the woods. Suddenly, they came upon a grizzly bear that rose up on its hind
legs and snarled. Instantly, the first president took off his knapsack and got out a pair of
jogging shoes. The second president said, “Hey, you can’t outrun that bear.” The first
president responded, “Maybe I can’t outrun that bear, but I surely can outrun you!” This
story captures the notion of strategic management, which is to achieve and maintain
competitive advantage.
4

5. Strategic Management
Strategic management can be defined as;
• The art and science of
• Formulating, implementing, and evaluating cross-functional decisions
• That enable an organization to achieve its objectives
Focuses on;
• Integration of Management, Marketing, Finance, Operations, R&D,
Production and Personnel Management.
5

6. Strategic Management Background
Purpose of Strategic Management;
• To exploit and create new and different opportunities for tomorrow.
Background of Strategic Management;
• Originated in 1950s, while become popular in 1960s and 1970s.
• 1990s, world wide practiced in the Business World.
6

7. Stages of Strategic Management
Strategic Management Process consist of three Stages;
1. Strategy Formulation
2. Strategy Implementation
3. Strategy Evaluation
7

8. First Stage – Strategy Formulation
Developing Vision and Mission
Identifying External Threats and Opportunities
Determining Internal Strengths and Weaknesses
Establishing long-term objectives, Strategies and alternatives
About;
• What new business to enter? How to abandon business? How to
allocate resources? Or how to avoid hostile takeover?
8

9. Second Stage – Strategy Implementation
Required for firm to;
• To establish annual objectives, Devise Policy, Motivate Employees
• Allocate resources to execute formulated
• Strategy-supportive culture, effective organizational structure,
• Redirecting Marketing, Preparing budget and utilizing Information
system.
• Linking employees compensation with organizational performance.
9

10. Third Stage – Strategy Evaluation
• In order, to modify strategy cause of internal and/ or External forces
• Major Evaluation Activities are;
1. Reviewing Internal and External factors Caused change in Strategy.
2. Measuring Performance
3. Take Corrective action
• Evaluation needed,
• Success today is not guarantee success of tomorrow
• Success always creates new and different problems.
10

11. Key Term in Strategic Management
11
Competitive
Advantage
Strategist Vision Mission Opportunities Objectives

12. Key Term in Strategic Management
A. Competitive Advantage;
• Anything that a firm does especially well compared to rivals.
• When a firm can do something that rival firms can not do.
B. Strategists;
• Individuals- responsible for success and failure of any organization.
• Job titles- Chief Executive Officer, President, Owner, Chair of the
Board, Executive Director, Dean and Chancellor etc.
12

13. Key Term in Strategic Management
C. Vision Statement;
• What do we want to become? 1st step in Strategic planning
• Vision of Stoke Eyes Clinic; our vision is to take care of your vision.
D. Mission Statement;
• Enduring statement of purpose that distinguish one firm from
similar firms.
• Identify Firm scope, products and values.
13

14. Key Term in Strategic Management
E. External Opportunities and Threats refers to;
• Economic, Social, Cultural, Demographic, Environmental, Legal,
Governmental, Technological and competitive trends.
• Benefit or harm organization in the future.
• Mostly beyond control of single Firm.
14

15. Key Term in Strategic Management
F. Internal Strengths and Weaknesses refers to;
• Organization controllable activities, may perform well or poorly
• Arise in; Marketing, Management, Finance, Accounting, Production,
Operation, Research and Development.
• Strategists try to;
• Capitalize internal strength
• Eliminate or minimize weaknesses
15

16. Key Term in Strategic Management
G. Long-term Objectives;
• Objective – Specific results that a firm seeks to achieve in perusing
its basic mission.
• Long-term means more than one year
H. Strategies;
• Strategies are the means by which to achieve long-term objectives.
• May be; Expansion, Diversification, integration, retrenchment….
16

17. Key Term in Strategic Management
I. Annual Objectives;
• Short term milestone, enable firm to achieve long-term objectives.
• Objectives must be SMART.
J. Policies;
• Policies are the means by which annual objectives will be achieved.
• Policy includes; established Guidelines, rules and procedures.
• Policy assist during decision making.
17

18. Strategic Management Model
18

19. Strategic Management Benefits
1. Financial Benefits
2. None financial Benefits
• Identification, prioritization and exploitation of opportunities.
• Manage and solve problems
• Activities control
• Integration of various functions
• Regular scanning
19

20. Why some firms do not Strategic Planning
1. Lack of Knowledge and experience in the Strategic planning
2. Poor reward Structures
3. Firefighting condition or crisis situation
4. Waste of time, Too expensive, Laziness
5. Content with success- no need for plan cause firm is successful
6. Fear of failure, prior bad experience, fear of unknown
7. Overconfidence and suspicion- lack of trust on Management.
20

21. Pitfalls in Strategic Planning
Some pitfalls, need to watch and avoid in strategic planning;
1. Using SP, to gain control over decision and resources
2. Doing SP, to satisfy accreditation or regulatory requirements
3. Fail to communicate Strategic plan
4. Top managers, not support Strategic planning
5. One man show, during strategic planning
6. Viewing planning as unnecessary or unimportant
21

22. Conclusion
• Strategic management is process of formulating, implementing
and evaluating strategy to achieve organizational goals.
• Strategic management stages are; Strategy formulation,
Implementation and Evaluation.
• Strategic Management, have financial and non-financials benefits.
• Following are mostly used words; Competitive advantage, SWOT,
Long-term objectives, Strategies, Policies.
• Strategic Management Model
22

23. References
1. Strategic Management Concepts and Cases Sixteen Edition by
Fred R. David.
2. Fundamental of Business Management Process by Marlon
Dumas and Jan Mandelling.
23