Prentice Hall, Inc. © Basic Concepts of Strategic Management Environmental Variables

Prentice Hall, Inc. © Environmental Scanning SWOT Analysis Strengths – Weaknesses Opportunities – Threats

Prentice Hall, Inc. © Strategy Formulation Developing long-range plans for effective management of opportunities and threats in light of corporate strengths and weaknesses

Prentice Hall, Inc. © Strategy Formulation – How to Codify a Strategy Mission Statement Purpose/reason for organization Promotes shared expectations Communicates public image Who we are; what we do; what we aspire to

Prentice Hall, Inc. © Organizational Adaptation Organization “fit” with environment Theory of population ecology Institution theory Strategic choice perspective Organizational learning theory

Prentice Hall, Inc. © Organizational Adaptation Strategic flexibility Demands long-term commitment to development of critical resources Demands firm become a learning organization

Prentice Hall, Inc. © Learning Organizations Learning Organization: An organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights

Prentice Hall, Inc. © Learning Organizations 4 Chief Activities of a Learning Organization Systematic problem solving New approach experimentation Learning from experiences Intra-organization knowledge transfer

Prentice Hall, Inc. © Basic Concepts of Strategic Management Hierarchy of Strategy

Prentice Hall, Inc. © Goals & Objectives Corporate Goals/Objectives –Profitability (net profit) –Growth –Resource utilization (ROE, ROI) –Market leadership

Prentice Hall, Inc. © Basic Concepts of Strategic Management 3 Types of Strategy –Corporate strategy –Business strategy –Functional strategy

Prentice Hall, Inc. © Basic Concepts of Strategic Management Corporate Strategy seeks one of these: –Stability –Growth –Retrenchment

1-13 Basic Concepts of Strategic Management Business Strategy –Competitive strategies –Cooperative strategies

1-14 Basic Concepts of Strategic Management Functional Strategy –Technological leadership –Technological followership

1-15 Basic Concepts of Strategic Management Strategic Decision-Making Process

1-16 Strategic Decision Making Strategic Decisions – Rare – Consequential – Directive

1-17 Strategic Decision Making Mintzberg’s Modes of Strategy Decision Making –Entrepreneurial mode – CEO-driven –Adaptive mode – ‘muddling through’ –Planning mode – process-driven –Logical incrementalism - mixture

1-18 Hambrick and Fredrickson – Good Strategy 5 Elements of Good Strategy 1.Arenas 2.Vehicles 3.Differentiators 4.Staging 5.Economic logic