4-Strategic management1 Strategic management Ridel A. 4

4-Strategic management2 Definition Process through which managers formulate and implement strategies geared toward optimizing strategic goal achievement, given available environmental and internal conditions

4-Strategic management3 Mission, goals External factors Internal factors SWOTStrategiesCarry-outControl Formulation Implementation STM Process

4-Strategic management4 Important of STM To identify and develop a competitive advantage To provide a sense of direction Highlight the need for innovation & provide approach

4-Strategic management5 Cooperate-level strategy What business? How strategy of those business? How resources are allocated?

4-Strategic management6 Grand strategies Growth Stability Defensive Concentration Vertical integration Diversification Harvest Turnaround Divestiture Bankruptcy Liquidation

4-Strategic management7 Grand strategies Stability: maintain status quo… Harvest: minimize investment, maximize short-run profits… Bankruptcy: to seek court protection… Liquidation: selling entire org…

4-Strategic management8 Business-level strategy Best means of competing Supporting the cooperate-level strategy Coordinating functional-level strategies

4-Strategic management9 Functional-level strategy Action plans for managing (functional area) Support business-level strategy

4-Strategic management10 SWOT analysis To analyze the organization’s competitive situation. To assessing: –Environmental assessment (External environment): O & T –Organizational assessment (Internal environment): S & W

4-Strategic management11 Environmental assessment Porter’s five forces model (≠ Porter’s strategies) Competitive forces –Rivalry –Bargaining power of suppliers –Bargaining power of customers –Threat of new entrants –Threat of substitute products or services

4-Strategic management12 Organizational assessment Also called “resource-based strategic view” Organizational resources… –Value –Rareness –Imitability –Organization

4-Strategic management13 Source Management, 3/e Kathry M. Bartol : University of Maryland, College Park David C. Martin : American University