Strategic Management

Introduction

Aims:
•To describe What and Why we need to study Strategic
Management
 Background

Central Question: Why do Firms differ?(Nelson, 1991)

Unit of Analysis

Focus Performance

Strategic Management
The way of thinking, decision making and managerial actions
that determine firm’s performance in the long run
 What Kind of Thinking?

1. Business is not only about entrepreneur and

his/her market.
 BUSINESS (Ferrell et al., 2011)
Value Creation

Entrepreneur Market

Value Capture 4
 Politics General Environment

Competitive Environment
S
New Entrants o
T
c
e
i
c
o
h
c
n
u
o
l
l
Suppliers t
o Entrepreneurs
u
g
Rivalry Among Existing Firms Customers r
y
a
l
Substitute Products

Economy
 What Kind of Thinking?

2. A firm does not live alone. Every firm has its own
environmental context that will affect and be
influenced by it.
Population Ecology approach -> every organism lives in their specific
habitat and has its own ecosystem.
 ENVIRONMENT
Economy
Sociocultural
New Entrance
Competitor
Supplier
Substitute Product
Politic FIRMS O
UT Customer
U T PU
Technology P
IN T

Firms need to interact with their environment appropriately

 What Kind of Thinking?

3. Strategic Thinking
Thinking Strategically:

1. What’s the company’s present situation?

2. Where does the company need to go from here?

– Business(es) to be in and market positions to stake out

– Buyer needs and groups to serve

– Direction to head/Outcomes to achieve

3. How should it get there?

– A company’s answer to “how will we get there?” is its

strategy

Consistsof competitive moves and business

approaches used by managers to run the
company
 Main Drivers of Strategic Management

• Globalization:
- Think globally act locally.
- Internationalisation of market and firm.
- Global considerations are needed in all kind of strategic
decision.
• Rapid change in technology and disperse.
• E-commerce become an vital tool in strategic management
- using internet in business transactions.
- competition based on a more on strategic level rather than
merely on traditional one such as features of product and cost.
• Intellectual capital: knowledge based competition.
• Highly employee involvement.
• Natural environment become important strategic issue.
 Key attributes in Strategic Management

• Direct the organization according to its goals & objectives.

• Involve the participation of various stakeholders in decision
making
• The need to incorporate short-term and long-term
perspectives.
• Recognizing the trade-off between efficiency and effectiveness.
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