The Strategic Management Process Chapter 1 The Strategic Management Process by Robert Pitts & David Lei Slides prepared by John P. Orr Cameron University Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

What you will learn… Slide 1 of 2 The importance of strategy and why it matters to organizations The key roles of vision, mission, and goals in shaping an organization’s future The four stages of the strategic management process Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

What you will learn… The concept of a SWOT analysis Slide 2 of 2 The concept of a SWOT analysis The concepts of corporate and business strategies The central role of ethics in strategy The different stakeholders of an organization Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

Basic Strategy Concepts Distinctive Competence The special skills, capabilities, or resources that enable a firm to stand out from its competition Terrain The environment (or industry) in which competition occurs Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

Exhibit 1-1: Military Strategy Internal External Match Special capabilities Battle terrain Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

Corporate Variety in Fast Foods McDonald’s Hamburgers Brinker International Gourmet hamburgers and similar cuisines Tricon Global Restaurants Non-hamburger cuisines Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

Exhibit 1-2: Business Strategy Internal External Strength Opportunity Apply, sustain Discover Strategy Overcome Avert Weakness Threat Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

Charting a Direction Vision – What a firm wants to be Mission – Describes the organization in terms of the: Business it is in Customers it serves Skills it intends to develop to fulfill its vision Goals and Objectives – Results to be achieved within a specific time period Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

Strategic Management Process Analysis Formulation Implementation Adjustment/ Evaluation Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

Exhibit 1-3: The Strategic Management Process Analysis Formulation Implementation Adjustment/ Evaluation External environment Internal environment Opportunities, Threats Strengths, Weaknesses Mission Policies Customers to be served Competencies to be developed Goals, guidelines for major activities Organization structure, systems, culture, etc. (Cycle to earlier steps) Slide 1- 8 Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Copyright (c) 2003 by South-Western, a division of Thomson Learning. All rights reserved.

Ex. 1-4: Multibusiness Enterprise Corporate Managers Chairman, Pres., Exec. VPs Business Managers Business #1 Business #2 Business #3 Research and Development Manufacturing/ Operations Marketing Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

Exhibit 1-5: Different Strategic Imperatives Internal External (1) Apply or Extend Advantage/Strength/Opportunity) Strength Opportunity Weakness/Opportunity (2) Sustain Advantage (3) Build Advantage Strength/Threat Weakness Threat Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

Characteristics of Strategic Decisions Large financial outlay Long-term impact Controversial nature Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

Who Are Strategic Managers? Business Managers Manage and operate a single line of business Corporate Managers Oversee and manage a portfolio of businesses Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

Key Stakeholders Organization Shareholders Senior Managers Customers Communities Employees Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.

Difficulties in Dealing With Stakeholders Legal Obligations Societal Expectations Personal Standards Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved.