STRATEGY and

STRATEGIC MANAGEMENT
 Study Questions

What is strategic management?

What types of strategies are used
by organization?
How are strategies formulated?
STRATEGY
Strategy is a comprehensive plan that
sets direction and guides the allocation
of resources to achieve long-term
objectives.
Strategy and Competitive Advantage
The competitive nature of organizational environment varies in
the following:
Monopoly Environment only one player and no competition
Oligopoly- Environment contains a few players who do not
directly compete against another.
Environment of hypercompetition- there are atleast several
players who directly compete with one another.
Strategic Management is
the process of formulating
and implementing
strategies.
Strategic Management Process

Strategy
Strategy Implementation
Formulation Putting strategies in
Creating strategy action

Identify Current Analyze: Revise mission *Implement Evaluates results

mission *Mission and and objectives and strategic plans and review
objectives select new *Mobilize strategic
objectives and strategies management
Resources
strategies *Values and
*Corporate process
corporate culture *Utilize
*Internal strengths *Business management
and weaknesses *Functional systems and
practices
*Environmental
opportunities and
threats
 Five Strategic Questions (Peter Ducker)

Who are our customers?

What do our customers consider
value?
What have been our results?
What is our plan?
 Benefits of Strategy
Profitability
Market Share
Human Talent
Financial Health
Cost Efficiency
Product Quality
Innovations
Social Responsibility
 Analysis of mission, values, and objectives
Mission - the reason for existence
Values- broad beliefs about what is or is not
appropriate
Corporate culture- predominant value system
as a whole
Operating Objectives- are specific results
that organizations try to accomplish
Analysis of Organizational Resources and Capabilities

A SWOT Analysis examines organizational

strengths and weaknesses and environmental
opportunities and threats

A core competency is a special strength that

gives an organization a competitive advantage
 Analysis of Industry and Environment
Potential Influences:
Macro environment factors- technology,
government, social structures and population
demographics, the global economy and the natural
environment
Industry environment- organizations resource
supplier, competitors, and costumer
 Levels of Strategy
Corporate Strategy-sets long term direction
for the total enterprise
Business Strategy -identifies how a division
or strategic business unit will compete in its
product or service domain
Functional Strategy- guides the use of
resources to implement business strategy
 Levels of Strategy in Large Business
Corporate strategy Corporation
What directions should we pursue as a
total enterprise?

Business Strategy
How do we compete in each of our
Division 1 Division 2 Division 3
major businesses?

Functional Strategy Research and Human

Manufacturing Marketing
How do we support each of our major Development Resources
businesses?
Department of Education
Types of Strategies
Growth strategies- increase in size and expansion of current
operations.
 Retrenchment Strategies- reduce the scale of operations in order to gain
efficiency and improve performance.

1. turn around- is a strategy downsizing to reduce cost and restructuring to

improve efficiency
2. divestiture- involves selling parts of the organization to refocus on core
competencies, cut cost and improve operating efficiency
3. liquidation-involves closing operations through the complete sale of assets
or the declaration of bankruptcy
 Stability Strategies- maintain the present course of action
without major operating changes
 Combination Strategies use the other strategies in
combination
Thank you!