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Strategic Management: Creating Competitive Advantage

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Title: Strategic Management: Text and Cases Subject: Chapter 1 PowerPoint Slides Author: R. Dennis Middlemist Description: Contact PowerPoint author at dennis_at_ ... – PowerPoint PPT presentation

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Title: Strategic Management: Creating Competitive Advantage


1
Chapter 1
  • Strategic Management Creating Competitive
    Advantage

2
Learning From Mistakes - Ford
  • Success Taurus
  • Mistakes
  • Letting the Taurus die (design, ads)
  • Thunderbird
  • GM 3.1 vs. 3.8 engine Aztec Grand Am
  • UAW

3
Perspectives of Leadership
  • Leaders can make a difference
  • Must be aware of opportunities and threats faced
    in external environment
  • Must have thorough understanding of the firms
    resources and capabilities
  • Are given much credit under the romantic view of
    leadership.
  • There is also the external view

4
Idea of Strategic Management
  • What is the goal of strategy (strategic
    management)?

5
Strategic Planning Objectives
  • Generating long term return for shareholders
    through competitive advantage is the primary
    objective of strategic planning.

6
What is Strategy?
  • Large-scale, future-oriented plan for interacting
    with competitive environment to achieve
    objectives
  • Companys game plan
  • Framework for managerial decisions

7
Strategic Management
  • Strategic management is the (study) action
    process of why some firms outperform others
  • How to compete in order to create competitive
    advantages in the marketplace
  • Unique and valuable
  • Difficult for competitors to copy or substitute

8
Strategic Management
  • Analysis
  • Strategic goals (vision, mission, strategic
    objectives)
  • Internal and external environment of the firm
  • Strategic decisions
  • What industries should we compete in?
  • How should we compete in those industries?
  • Actions
  • Allocate necessary resources
  • Design the organization to bring intended
    strategies to reality
  • Control insuring that the strategy is
    implemented

9
Strategic Management Concepts
  • Definition Strategic management consists of the
    analysis, decisions, actions and control an
    organization undertakes in order to create and
    sustain competitive advantages.
  • Key attributes of strategic management
  • Directs the organization toward overall goals and
    objectives.
  • Includes multiple stakeholders in decision making
  • Needs to incorporate short-term and long-term
    perspectives
  • Recognizes trade-offs between efficiency and
    effectiveness

10
What Strategy is NOT About
  • Short term (or any) actions designed to
    manipulate a stock price!
  • A series of small incremental changes to manage
    the business.

11
Key Questions
  • What businesses will we compete in?
  • How will we outperform competition?

12
Additional Concepts
  • Product Champions
  • Product Managers
  • Make the numbers or else!

13
Textbook Layout - Logic
  • First section Analysis
  • Introduction
  • External Environment
  • Internal Environment
  • Intellectual Assets

14
Textbook Layout - Logic
  • Second section Strategy Formulation
  • Business level strategy
  • Corporate level strategy
  • International strategy
  • Entrepreneurial strategy

15
Textbook Layout - Logic
  • Third section Strategy Implementation
  • Control and governance
  • Organization designs
  • Learning ethics
  • Motivating innovation and entrepreneurship

16
Operational Effectiveness
  • Michael Porter Strategy is all about being
    different from someone else.
  • Effectiveness doing the right things
    (transformational leadership)
  • Efficiency doing things right (transactional
    leadership)

17
Corporate Governance and Stakeholder Management
  • Corporate governance the relationship among
    various participants in determining the direction
    and performance of corporations
  • Shareholders
  • Management (led by the CEO)
  • Board of directors

18
Corporate Governance and Stakeholder Management
  • Board of directors
  • Elected represent- atives of the owners
  • Ensure interests and motives of
    man- agement are aligned with
    those of the owners
  • Proper managerial rewards and incentives

19
Stakeholder Management
  • Who are stakeholders?
  • Insiders?
  • Outsiders?

20
Stakeholder Management
  • Two views of stakeholder management
  • Zero sum
  • Stakeholders compete for attention and resources
    of the organization
  • Gain of one is a loss to the other
  • Symbiosis
  • Stakeholders are dependent upon each other
  • Mutual benefits

21
Social Responsibility
  • Social responsibility the expectation that
    businesses or individuals will strive to improve
    the overall welfare of society
  • Managers must take active steps to make society
    better
  • Socially responsible behavior changes over time
  • Triple bottom line

22
Strategic Management Perspective
  • Integrative view of the organization
  • Assess how functional areas and activities fit
    together to achieve goals and objectives
  • All managers and employees must take and
    integrative, strategic perspective of issues
    facing the organization

23
Strategic Management Perspective
  • Key driving forces increasing the need for
    strategic perspective and involvement
  • Globalization
  • Technology
  • Intellectual capital
  • These forces are
  • Interrelated
  • Accelerating the rate of change and uncertainty

24
Enhancing Employee Involvement
  • Have significant profit and loss responsibility

25
Enhancing Employee Involvement
  • Champion and guide ideas
  • Create a learning infrastructure
  • Establish a domain for taking action

26
Enhancing Employee Involvement
  • Have little positional power and formal authority
  • Generate their power through the conviction and
    clarity of their ideas

27
Coherence in Strategic Direction
  • Company vision
  • Massively inspiring
  • Overarching
  • Long-term
  • Driven by and evokes passion
  • Fundamental statement of the organizations
  • Values
  • Aspiration
  • Goals

Company vision
28
Coherence in Strategic Direction
  • Mission statements
  • Purpose of the company
  • Basis of competition and competitive advantages
  • More specific than vision has 3 or 4 parts
    target market(s), product(s), channel(s) of sale.
  • Focused on the means by which the firm will
    compete

Mission statements
29
Coherence in Strategic Direction
  • Strategic objectives
  • Operationalize the mission statement
  • Provides measurement goals for results
  • More specific
  • Cover a more well-defined time frame

Strategic objectives
30
Coherence in Strategic Direction
Strategic objectives
  • Measurable
  • Specific
  • Appropriate
  • Realistic
  • Timely
  • Challenging
  • Resolve conflicts that arise
  • Yardstick for rewards and incentives
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