Management, 6e Schermerhorn Prepared by Cheryl Wyrick California State Polytechnic University Pomona John Wiley & Sons, Inc

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Schermerhorn - Chapter 83 Chapter 8 Strategic Management and Entrepreneurship 4 Planning Ahead –What is strategic management? –What types of strategies are used by organizations? –How are strategies formulated? –What are the issues in strategy implementation and control? –What is entrepreneurship?

Schermerhorn - Chapter 84 Strategy and Strategic Management 4 Strategy and Competitive Advantage –Strategy is an action focus that links an organization to its environment

Schermerhorn - Chapter 85 Strategy and Strategic Management 4 Strategy and Competitive Advantage –Types of Organizational Environments monopoly oligopoly hypercompetition

Schermerhorn - Chapter 86 Strategy and Strategic Management 4 The Strategic Management Process –the process of formulating and implementing strategies to advance an organization’s mission and objectives and secure competitive advantage

Schermerhorn - Chapter 87 Strategy and Strategic Management 4 The Strategic Management Process –Strategy formulation (Drucker) What is our business mission? Who are our customers? What do our customers consider value? What have been our results? What is our plan?

Schermerhorn - Chapter 88 Strategy and Strategic Management 4 The Strategic Management Process –Strategy implementation putting plans into action

Schermerhorn - Chapter 89 Strategy and Strategic Management 4 Analysis of Mission, Values, and Objectives –Mission statement domain –customers –products and/or services –location philosophy

Schermerhorn - Chapter 810 Strategy and Strategic Management 4 Analysis of Mission, Values, and Objectives –Strategic constituencies analysis assessment of how well the organization serves stakeholders

Schermerhorn - Chapter 811 Strategy and Strategic Management 4 Analysis of Mission, Values, and Objectives –Core values broad beliefs about what is/is not appropriate –Objectives direct activities toward key and specific results

Schermerhorn - Chapter 812 Strategy and Strategic Management 4 Analysis of Organizational Resources and Capabilities –SWOT analysis Organizational –Strengths –Weaknesses Environmental –Opportunities –Threats

Schermerhorn - Chapter 813 Strategy and Strategic Management 4 Analysis of Industry and Environment –Assessment of actual and future environmental conditions macro environment industry environment

Schermerhorn - Chapter 814 Strategies Used by Organizations 4 Levels of Strategy –corporate –business –functional

Schermerhorn - Chapter 815 Strategies Used by Organizations 4 Types of Strategies –growth concentration diversification

Schermerhorn - Chapter 816 Strategies Used by Organizations 4 Types of Strategies –retrenchment (defensive) turnaround divestiture liquidation

Schermerhorn - Chapter 817 Strategies Used by Organizations 4 Types of Strategies –stability –combination used by large and complex organizations

Schermerhorn - Chapter 818 Strategy Formulation 4 Opportunities for Competitive Advantage –Cost and quality –Knowledge and timing –Barriers to entry –Financial resources

Schermerhorn - Chapter 819 Strategy Formulation 4 Portfolio Planning –investing scarce organizational resources among competing business opportunities

Schermerhorn - Chapter 820 Strategy Formulation 4 Boston Consulting Group (BCG) Matrix –ties strategy formulation to analysis of business opportunities according to market growth rate and market share stars cash cows question marks dogs

Schermerhorn - Chapter 821 Strategy Formulation 4 Porter’s Competitive Strategies Model –new competitors –bargaining power of suppliers –bargaining power of customers –threats of substitute products and services –competition between existing companies

Schermerhorn - Chapter 822 Strategy Formulation 4 Porter’s Competitive Strategies Model –Strategies to Gain Competitive Advantage differientiation cost leadership focus

Schermerhorn - Chapter 823 Strategy Formulation 4 Adaptive Strategies –Choose strategy consistent with external environment prospector defender analyzer reactor

Schermerhorn - Chapter 824 Strategy Formulation 4 Product Life Cycles –Stages introduction growth maturity decline

Schermerhorn - Chapter 825 Strategy Formulation 4 Emergent Strategies –develop progressively over time 4 Logical incrementalism –strategies that develop as modest adjustments to past patterns

Schermerhorn - Chapter 826 Strategy Implementation 4 Strategic Management Failures –Substance inadequate attention to major strategic planning elements –Process poor handling of strategy implementation

Schermerhorn - Chapter 827 Strategy Implementation 4 Leadership and Top Management Teams –effective strategy implementation depends on all managers 4 Corporate Governance –boards of directors inside outside

Schermerhorn - Chapter 828 Strategy and Entrepreneurship 4 Who are the Entrepreneurs? –Risk-taking individuals who pursue opportunities that others do not see

Schermerhorn - Chapter 829 Strategy and Entrepreneurship 4 Typical Characteristics of Entrepreneurs internal locus of control high energy level high need for achievement tolerance for ambiguity self-confidence action oriented

Schermerhorn - Chapter 830 Strategy and Entrepreneurship 4 Entrepreneurship and Small Business –Small business fewer than 500 employees most common type of business in the U.S. high failure rate

Schermerhorn - Chapter 831 Strategy and Entrepreneurship 4 Small Business Development –Small Business Administration (SBA) Small Business Development Centers –offer guidance on how to run a business successfully

Schermerhorn - Chapter 832 Strategy and Entrepreneurship 4 Entrepreneurship and Large Enterprises –intrapreneurship entrepreneurial behavior within large organizations –skunk works groups of employees who work in a creative setting