Presentation on Sm by Haseeb

8/9/2019 Presentation on Sm by Haseeb

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Prentice Hall, 2000 Chapter 1 1

Definition ofDefinition of

Strategic ManagementStrategic Management

Strategic ManagementStrategic ManagementThat set of managerial decisions and actionsThat set of managerial decisions and actions

that determines the longthat determines the long--run performance of arun performance of a

corporationcorporation

HASEEB AND IRFAN PRESENTATION ROLLNO.27 ,21,456,451HASEEB AND IRFAN PRESENTATION ROLLNO.27 ,21,456,451


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PRESENTATIONONPRESENTATIONON

STRATEGIC MANAGEMENTSTRATEGIC MANAGEMENT

BY HASEEB & IRFANBY HASEEB & IRFAN

CLASS NO 27, 21CLASS NO 27, 21


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B

enefits of Strategic ManagementB

enefits of Strategic Management

Clearer sense of strategic visionClearer sense of strategic vision

Sharper focus on what is strategically importantSharper focus on what is strategically important

Improved understanding of rapidly changingImproved understanding of rapidly changing

environmentenvironment



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Three Key Strategic QuestionsThree Key Strategic Questions

Where is the organization now?Where is the organization now?

If no changes are made, where will theIf no changes are made, where will the

organization be in one, two, five or ten years?organization be in one, two, five or ten years?

Are the answers acceptable?Are the answers acceptable?

If the answers are not acceptable, what specificIf the answers are not acceptable, what specific

actions should management undertake? Whatactions should management undertake? Whatare the risks and payoffs involved?are the risks and payoffs involved?



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L

earningL

earningO

rganizationO

rganization

An organization skilled at creating, acquiring,An organization skilled at creating, acquiring,

transferring knowledge, and at modifying itstransferring knowledge, and at modifying its

behavior to reflect new knowledge and insightsbehavior to reflect new knowledge and insights



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Composition ofComposition of

Strategic ManagementStrategic Management

Strategic Management is Composed ofStrategic Management is Composed of1.1. Environmental scanningEnvironmental scanning

2.2. Strategy formulationStrategy formulation

3.3. Strategy implementationStrategy implementation

4.4. Evaluation and controlEvaluation and control



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Basic Elements of the StrategicBasic Elements of the StrategicManagement ProcessManagement Process

Evaluationand

Control

StrategyImplementation

EnvironmentalScanning

StrategyFormulation



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Evaluation

and Controland Control

Strategic Management ModelStrategic Management Model

StrategyFormulation

StrategyImplementation

Mission

Objectives

Strategies

Policies

Feedback/Learning

Environmental

Scanning

Societal

Environment

General Forces

Task

Environment

Industry Analysis

Structure

Chain of Command

Resources

Assets, Skills

Competencies,

Knowledge

Culture

Beliefs, Expectations,

Values

Reason for

existence

What results

toaccomplish

by when Plan to

achieve the

mission &

objectives Broad

guidelines for

decision

making

Programs

Activities

needed to

accomplish

a plan

Budgets

Cost of theprograms Procedures

Sequence

of steps

needed to

do the job

Process

to monitor

performance

and take

corrective

action

Performance

External

Internal

Evaluation

and Control



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Environmental VariablesEnvironmental Variables

Societal Environment

Economic

Forces

Technological

Forces

Political-Legal

Forces

SocioculturalForces

InternalEnvironment

StructureCulture

Resources

Shareholders

Governments

Customers

Creditors

Communities

Competitors

Employees/

Labor Unions

Suppliers

SpecialInterestGroups

Trade Associations

TaskEnvironment

(Industry)



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SocietalE

nvironmentSocietalE

nvironment

Composed of general forces in environmentComposed of general forces in environment



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Task EnvironmentTask Environment

Composed ofComposed of

Groups in environment that directly affect or areGroups in environment that directly affect or are

affected by the organizations operationsaffected by the organizations operations

(Often called industry)(Often called industry)



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StructureStructure

The way a corporation is organized in terms ofThe way a corporation is organized in terms of

communication, authority, and workflowcommunication, authority, and workflow



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Corporate CultureCorporate Culture

Collection of beliefs, expectations, and valuesCollection of beliefs, expectations, and values

learnedlearnedandand sharedsharedby members andby members and transmittedtransmitted

from one generation of employees to anotherfrom one generation of employees to another



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ResourceResource

An asset, competency, process, skill, orAn asset, competency, process, skill, or

knowledge controlled by the corporationknowledge controlled by the corporation



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Definition of Strategy FormulationDefinition of Strategy Formulation

Strategy FormulationStrategy Formulation

The process of developing longThe process of developing long--range plans torange plans to

deal effectively with environmental opportunitiesdeal effectively with environmental opportunitiesand threats in light of corporate strengths andand threats in light of corporate strengths and

weaknessesweaknesses

Composed ofComposed of

MissionMission ObjectivesObjectives

StrategiesStrategies

PoliciesPolicies



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Definition ofO

bjectivesDefinition ofO

bjectives

ObjectivesObjectivesThe end results of planned activity. They stateThe end results of planned activity. They state

WHAT is to be accomplished by WHEN. TheyWHAT is to be accomplished by WHEN. They

should be quantified, if possible.should be quantified, if possible.



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Areas in Which toAreas in Which to

Set ObjectivesSet Objectives

ProfitabilityProfitability

EfficiencyEfficiency

GrowthGrowth Shareholder wealthShareholder wealth

Utilization of resourcesUtilization of resources

ReputationReputation

Contributions to employeesContributions to employees

Contributions to societyContributions to society

Market leadershipMarket leadership

Technological leadershipTechnological leadership

SurvivalSurvival

Personal needs of managementPersonal needs of management



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Definition of StrategyDefinition of Strategy

StrategyStrategyA comprehensive master plan stating HOW theA comprehensive master plan stating HOW the

corporation will achieve its mission andcorporation will achieve its mission and

objectivesobjectives



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Definition ofDefinition ofBusiness StrategyBusiness Strategy

Emphasizes improving the competitive positionEmphasizes improving the competitive position

of a corporations products or unitsof a corporations products or units



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Definition ofDefinition ofFunctional StrategyFunctional Strategy

Maximizes resource productivityMaximizes resource productivity



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Hierarchy of StrategyHierarchy of Strategy

Corporate StrategyCorporate Strategy

Business

(Division Level)Strategy

Functional

Strategy



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Definition of PoliciesDefinition of Policies

PoliciesPoliciesBroad guidelines for making decisionsBroad guidelines for making decisions



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Definition of StrategyDefinition of StrategyImplementationImplementation

Strategy ImplementationStrategy ImplementationThe process of putting strategies and policies intoThe process of putting strategies and policies into

action through the development ofaction through the development of

ProgramsPrograms

BudgetsBudgets ProceduresProcedures



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Definition ofP

rogramDefinition ofP

rogram

ProgramProgramA statement of activities or steps needed toA statement of activities or steps needed to

accomplish a singleaccomplish a single--use planuse plan



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Definition of BudgetDefinition of Budget

BudgetBudgetA statement of a corporations program in dollarA statement of a corporations program in dollar

termsterms



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Definition of ProceduresDefinition of Procedures

ProceduresProcedures

A system of sequential steps or techniquesA system of sequential steps or techniques

that describe in detail how to perform athat describe in detail how to perform a

particular task or jobparticular task or job



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TriggeringEvents forTriggeringEvents for

Strategic ChangeStrategic Change

New CEONew CEO

External interventionExternal intervention

Threat of a change in ownershipThreat of a change in ownership

Performance gapPerformance gap



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Characteristics ofCharacteristics ofStrategic DecisionsStrategic Decisions

RareRare

ConsequentialConsequential

DirectiveDirective



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Modes of Strategy FormulationModes of Strategy Formulation

EntrepreneurialEntrepreneurial

AdaptiveAdaptive

PlanningPlanning

Logical incrementalismLogical incrementalism



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Strategic DecisionStrategic Decision--MakingProcessMakingProcess)

Review andRevise asNecessary:yMissiony Objectives

GenerateandEvaluateStrategicAlterna-tives

SelectandRecommendBestAlternative

ImplementStrategies:y Programsy Budgetsy Procedures

EvaluateandControl

Strategy

Implementation

Step 7

5(b) 6(a) 6(b) 7 8

AnalyzeExternalFactors:y Opportun-

itiesy Threats

Scan andAssessInternalEnvironment:y StructureyCultureyResources

AnalyzeInternalFactors:y Strengthsy Weak-

nesses

SelectStrategicFactors(SWOT)in Light ofCurrentSituation

Scan andAssessExternalEnvironment:ySocietalyTask

EvaluateCurrentPerformanceResults

Examine andEvaluate theCurrent:y MissionyObjectivesy Strategiesy Policies

ReviewCorporateGovernance:y Board of

Directorsy Top Man-

agement

Strategy

Formulation:

Steps 1 6

3(a)

1(a) 1(b) 2 5(a)

4(a)

3(b)

4(b)

Evaluationand

Control:Step 8



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Strategic Management Process at MaytagStrategic Management Process at MaytagC

orporation (1993): Mission &O

bjectivesC

orporation (1993): Mission &O

bjectives

Strategy FormulationStrategy Formulation

MissionMission

BroadBroad: To serve the best interests of shareowners,: To serve the best interests of shareowners,

customers, and employeescustomers, and employees

NarrowNarrow: To become a full: To become a full--line globallyline globally--oriented majororiented major

home appliance manufacturer and marketerhome appliance manufacturer and marketer

ObjectivesObjectives Increased profitabilityIncreased profitability

Number one in customer satisfactionNumber one in customer satisfaction

Number three in North American unit salesNumber three in North American unit sales



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Strategic ManagementP

rocess atStrategic ManagementP

rocess atMaytagCorporation (1993): StrategiesMaytagCorporation (1993): Strategies& Policies& Policies

StrategiesStrategies To grow horizontally where the corporation is not yet well representedTo grow horizontally where the corporation is not yet well represented

through external acquisition or joint venturesthrough external acquisition or joint ventures

To grow horizontally internally by improving efficiency and quality ofTo grow horizontally internally by improving efficiency and quality of

acquired companies and by using one business units expertise in oneacquired companies and by using one business units expertise in oneacquired are to introduce quality products from a business unit inacquired are to introduce quality products from a business unit in

another areaanother area

PoliciesPolicies No cost reduction proposal will be approved if it reduces product qualityNo cost reduction proposal will be approved if it reduces product quality

in any wayin any way

Every product, from the least expensive to the highest priced, should beEvery product, from the least expensive to the highest priced, should be

superior to the competition in overall quality and performancesuperior to the competition in overall quality and performance

The corporation must not emphasize market share at the expense ofThe corporation must not emphasize market share at the expense of

profitabilityprofitability

Business units must be managed for synergies, while simultaneously theBusiness units must be managed for synergies, while simultaneously the

specialized expertise among those units must be allowed to flourishspecialized expertise among those units must be allowed to flourish


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Strategic Management Process at MaytagStrategic Management Process at Maytag

Corporation (1993): Programs & BudgetsCorporation (1993): Programs & Budgets

ProgramsPrograms

Work with BoschWork with Bosch--Siemens to develop joint marketing andSiemens to develop joint marketing and

supplier agreements for Hoover appliancessupplier agreements for Hoover appliances

Analyze and develop Asian markets through currentAnalyze and develop Asian markets through current

distributors and licensees and through joint venturesdistributors and licensees and through joint ventures

Develop new appliances for continental EuropeDevelop new appliances for continental Europe

Develop TV advertising for JennDevelop TV advertising for Jenn--Air and Magic ChefAir and Magic Chef

Consolidate production of washers and dryers inConsolidate production of washers and dryers in

dedicated plantsdedicated plants

BudgetsBudgets

Prepare budgets for each planned programPrepare budgets for each planned program


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Corporation (1993): ProceduresCorporation (1993): Procedures

ProceduresProcedures Develop procedures for joint purchasing and jointDevelop procedures for joint purchasing and joint

marketing ofBoschmarketing ofBosch--Siemens with HooverSiemens with Hoover

Coordinate marketing, manufacturing, andCoordinate marketing, manufacturing, and

purchasing activities of business units throughpurchasing activities of business units through

committeescommittees

Research and development takes place in unitResearch and development takes place in unit

housing each product linehousing each product line Consolidate all advertising under one agency, butConsolidate all advertising under one agency, but

establish internal advertising for each brandestablish internal advertising for each brand

categorycategory



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Corporation (1993): Evaluation & ControlCorporation (1993): Evaluation & Control

Evaluation & ControlEvaluation & Control Require all business units to provideRequire all business units to provide monthlymonthly statusstatus

reports on sales and costs by product line plus anyreports on sales and costs by product line plus any

trends in expensestrends in expenses

Require all business units to provideRequire all business units to provide annualannual reportsreports

giving operating revenues, costs, and expenses as wellgiving operating revenues, costs, and expenses as wellas identifiable assets in dollars, plus property additionsas identifiable assets in dollars, plus property additions

and deletionsand deletions

Require all business units to provideRequire all business units to provide quarterlyquarterly

assessments of competitive activity and overall trendsassessments of competitive activity and overall trends

affecting each of their product linesaffecting each of their product linesHASEEB ASGHAR BALOCHHASEEB ASGHAR BALOCH

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