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The Process of Strategic Management: How Firms Create And Maintain Competitive Advantages


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Title: The Process of Strategic Management: How Firms Create And Maintain Competitive Advantages

The Process of Strategic ManagementHow Firms
Create And MaintainCompetitive Advantages
  • Learning Objectives
  • Understand the definition, key processes,
    attributes and generic model of strategic
  • Understand the concept of coherence in strategic
  • Gain awareness of the importance and limits of
    corporate social responsibility

Definitions of Strategic Management
  • consists of the analysis, decisions and actions
    an organization undertakes to create and sustain
    competitive advantage
  • Dess, Lumpkin Taylor
  • should develop and exploit valuable, rare and
    costly-to-imitate resources, leading to sustained
    competitive advantage and above normal
  • Barney
  • a unified , comprehensive and integrated plan
    designed to ensure that the basic objectives of
    the enterprise are achieved
  • Glueck

Key Attributes Of Strategic Management
  • What characteristics define a quality strategic
    management process?
  • Guides the organization toward goals and
  • Recognizes the demands of multiple stakeholders
  • Incorporates both short-term and long-term
  • Recognizes trade-offs between effectiveness and

General Model of Strategic Management
Strategy Formulation
SWOT Analysis(company profile)(Ind. / Env.
Strategy Implementation
General Model of Strategic Management
  • Vision statement fundamental statement of an
    organizations values, aspirations, goals
  • Mission statement describes the purpose of the
    organization, basis of competition, competitive
  • Objectives - Measurable performance targets,
    financial and/or strategic
  • Strategies means, plans or commitments to
    achieve a firms mission and objectives
  • Tactics - Actions or policies to implement

Vision Mission Statements
  • Benefits of having vision and mission statements
  • unanimity of purpose
  • employee motivation
  • culture / focal identity
  • allocating resources
  • Improved performance?
  • Are there disadvantages of vision and mission
  • Why dont all companies have vision and mission
  • Do you know your companys vision/mission

The Vision Statement
  • inspiring, overarching and long-term view of
    the organizations primary directive
  • Typical components
  • organizations values, aspirations, goals
  • Slogan or mental picture that grabs ones
  • Examples
  • restoring patients to full life (Medtronic)
  • the worlds best quick service restaurant

The Mission Statement
  • more specific and focused statement on how the
    firm plans to operate and compete
  • Typical components
  • Primary market or technology
  • Goals growth, profitability, survival
  • Basic beliefs, company philosophy
  • Public image, self-concept
  • Customers
  • Quality
  • Examples

Geisingers Mission Statement
  • Enhancing quality of life through an integrated
    health service organization based on a balanced
    program of patient care, education, research and
    community service.

Nikes Mission Statement
  • To bring inspiration and innovation to every
    athlete in the world.

Southwest Airlines Mission Statement
  • The mission of Southwest Airlines is dedication
    to the highest quality of customer service
    delivered with a sense of warmth, friendliness,
    individual pride, and company spirit.

Dells Mission Statement
  • Dell's mission is to be the most successful
    computer company in the world at delivering the
    best customer experience in markets we serve. In
    doing so, Dell will meet customer expectations
  • Highest quality
  • Leading technology
  • Competitive pricing
  • Individual and company accountability
  • Best-in-class service and support
  • Flexible customization capability
  • Superior corporate citizenship
  • Financial stability

UNLVs Mission Statement
  • The University of Nevada, Las Vegas, located in
    the vibrant and dynamic city of Las Vegas and
    surrounded by the Mojave Desert, is emerging as a
    premier urban university. UNLVs development
    embraces the traditional values of higher
    education adapted for the global community of the
    21st century. The university increasingly will
    concentrate its resources on programs that are
    student centered, demonstrably excellent, and
    responsive to the needs of the local and regional
  • UNLV promotes an environment that encourages the
    full personal and professional development of
    those it serves and of those who serve the
    university. UNLV assists students in meeting the
    intellectual and ethical challenges of
    responsible citizenship and a full and productive
    life through opportunities to acquire the
    knowledge and common experiences that enhance
    critical thinking, leadership skills, aesthetic
    sensitivity, and social integrity.
  • The university provides traditional and
    professional academic programs for a diverse
    student body and encourages innovative and
    interdisciplinary approaches to teaching,
    learning, and scholarship. Recognizing the
    individuality of each student, UNLV
    simultaneously engenders collegial relationships
    and a sense of community among its members. UNLV
    embraces the interdependence of quality
    instruction, scholarly pursuits, and substantive
    involvements in campus and community life.
  • The university offers artistic, cultural, and
    technical resources and opportunities to the
    broadest possible community. It promotes research
    programs and creative activities by students and
    faculty that respond to the needs of an urban
    community in a desert environment.
  • UNLV is committed to developing a synergy between
    professional and liberal studies, between
    undergraduate education and graduate programs,
    and between superior teaching and meaningful
    research. UNLV increasingly is a dynamic resource
    for, and partner with, the community that it

Setting Objectives
  • Purpose of setting Objectives is to
  • convert mission into performance targets
  • create yardsticks to track performance
  • establish goals that require stretch
  • push firm to be inventive, focused
  • Criteria for strategic objectives
  • Measurable
  • Specific
  • Appropriate
  • Realistic
  • Timely
  • Financial and strategic objectives

Financial Objectives
  • objectives that relate to improving firms
    financial performance
  • Examples
  • increase ROI from 15 to 20
  • maintain AA bond rating
  • increase earnings growth from 10 to 15
  • Other examples?

Strategic Objectives
  • objectives that consider improvement in
    competitiveness or market position
  • Examples
  • Increase market share from 15 to 18
  • Surpass rivals on customer service
  • Achieve lower cost than competitors
  • Achieve technological superiority
  • Other examples?

Types of Strategies
  • Business strategies (competitive)
  • Corporate strategies (alliances, M A)
  • Porters generic strategies the general
    strategic orientation of the firm.
  • Cost leadership
  • Differentiation
  • Focus or niche
  • Emergent strategies

  • Actions to implement strategy
  • Policies and procedures to get line employees to
    follow the firms strategy
  • Messy issues of strategy implementation, not

Ensuring Strategic Coherence
  • employees and managers throughout the
    organization striving for common goals and
  • a hierarchy of goals and objectives

Strategic Management and Social Responsibility
  • corporate social responsibility is the
    expectation that firms will proactively attempt
    to improve the overall welfare of society
  • Is this a reasonable expectation?
  • How can we best hold businesses accountable?
  • Have we (US firms) gotten better or worse?