1. Formulation, Implementation and Evaluation
Strategic Management
Formulation, Implementation and Evaluation

2. Course Objectives Understand the Strategic management concepts.
How to be a strategic thinker .
How to create a competitive advantages to your business.
Develop students’ skills in strategy design, implementation and evaluation.
How culture differences affect management.
Develop the knowledge on the influence of social responsibility on business strategy.
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3. Teaching Techniques Lecturing and discussions.
Using cases in teaching : Real cases and problem solving.
Presentations from students.
Group work, teamwork and assignments.
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4. Course Contents
Concepts and definitions: Strategy, Strategic management, strategic planning, Importance of strategic management, Internal and external environment analysis, competitive advantages, stakeholders, social responsibility and so on.
Tools will be used in analysis, e.g., SWOT, value chain, resource – based approach, industrial analsis.
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5. Course Contents continue
Types of Strategies: Corporate-Level Strategies, Business Unit Strategies, Functional/operational Strategies.
Strategy Formulation: Business Mission, strategy analysis and choice, corporate objectives and strategies.
Strategy Implementation: Organizational Structure, assessment of Organizational Structure, restructuring and reengineering, short-term objectives and programs and activities.
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6. Course Contents continue
Strategy Evaluation and control: processes of evaluation, measuring performance and corrective action.
Global Issues in strategic management: global competition, managing cross-cultures.
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7. Strategic Management Defined
Art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.
Strategy
“Top Management’s plan to attain outcomes consistent with the organization’s mission and goals” (Wright, Kroll and Parnell,1998)
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8. Strategic management
A continuous process of change and modification: intended strategy, realized strategy.
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9. Strategic Management Defined
Set of managerial decisions and actions that determines the long-run performance of a firm.
It includes environmental scanning, strategy formulation, strategy implementation, and evaluation and control.
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10. Internationalization of markets and corporations
Basic Concepts of Strategic Management
Globalization
Internationalization of markets and corporations
Global (worldwide) markets rather than national markets
International consideration have led to the staregic alliance between BA and American Airlines.
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11. Use of the Internet to conduct business transactions
Basic Concepts of Strategic Management
Electronic Commerce
Use of the Internet to conduct business transactions
Basis for competition on a more strategic level rather than traditional focus on product features and costs.
AMR Research indicated that industry leaders are in the process of moving % of their B2B transactions to the internet.
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12. Electronic Commerce – Trends
Basic Concepts of Strategic Management
Electronic Commerce – Trends
Forcing company transformation to use internet in their business.
Market access & branding changing – disintermediation of traditional distribution channels; dealing direct with end consumer.
Balance of power shift to consumer: customer became more knowledgeable.
Competition changing; exploiting the interned to become more innovative.
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13. Electronic Commerce -- Trends
Basic Concepts of Strategic Management
Electronic Commerce -- Trends
Pace\speed of business increasing; time is compressed into ‘dog years’.
Internet purchasing beyond traditional boundaries. Separation between business –supplier-customer became blurred.
Knowledge key asset – source of competitive advantage
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14. Strategy Implementation
Three-Stage Process
Strategy Formulation
Strategy Implementation
Strategy Evaluation
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15. Opportunities & Threats Strengths & Weaknesses Alternative Strategies
Strategy Formulation
Vision & Mission
Opportunities & Threats
Strengths & Weaknesses
Long-Term Objectives
Alternative Strategies
Strategy Selection
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16. Strategy Formulation Issues include: What new businesses to enter
What businesses to abandon
How to allocate resources
Expand operations or diversify
Enter international markets
Merge or form joint venture
Avoidance of hostile takeover
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17. Strategy Implementation
Annual Objectives
Policies
Employee Motivation
Resource Allocation
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18. Strategy Implementation
Action Stage of strategic management:
Most difficult stage
Mobilizing employees and managers
Interpersonal skills are critical
Consensus on pursuing goals
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19. Performance Measurement
Strategy Evaluation
Internal Review
External Review
Performance Measurement
Corrective Action
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20. Strategy Evaluation Final stage of strategic management:
All strategies subject to future modification
Success today is no guarantee of success tomorrow
Success creates new and different problems
Complacency\satisfaction leads to demise \end.
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21. Prime Task of Strategic Management
According to Peter Drucker…
The prime task is to think through the overall mission of a business
Ask the question:
What is our Business?
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22. Integrating Intuition and Analysis
The strategic management process attempts to organize quantitative and qualitative information under conditions of uncertainty.
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23. Integrating Intuition and Analysis
Intuition based on:
Past experiences
Judgment
Feelings
Useful for decision making
Conditions of great uncertainty
Conditions with little precedent/guide
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24. Integrating Intuition and Analysis
Intuition and judgment
Management at all levels
Analyses are influenced
Analytical thinking and intuitive thinking
Complement each other
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25. Adaptation to Change Organizations must monitor events
On-going process
Internal and external events
Timely changes
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26. Adaptation to Change Rate and magnitude of changes
Increasing dramatically
E-commerce
Demographics
Technology
Merger-mania (fashion)
Effective Adaptation
Long-run focus
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27. Adaptation to Change Key strategic-management questions:
What kind of business should we become?
Are we in the right fields?
Should we reshape our business?
What new competitors are entering our industry?
What strategies should we pursue?
How are our customers changing?
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28. Key Terms
Strategists
Most responsible for success or failure of an organization
Various job titles:
Chief executive officer
President
Owner
Chair of the Board
Executive Director
Entrepreneur
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29. Strategic-Management Model
Strategic-Management Process –
Dynamic and Continuous
More formal in larger organizations
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30. Benefits of Strategic Management
Proactive in shaping organization’s future
Initiate and influence activities
Formulate better strategies
Systematic, logical, rational approach
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31. Benefits of Strategic Management
Financial benefits
Improvement in sales
Improvement in profitability
Improvement in productivity
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32. Benefits of Strategic Management
Non-Financial benefits
Enhanced awareness of external threats
Improved understanding of competitors’ strategies
Increased employee productivity
Reduced resistance to change
Understanding of performance-reward relationships
Enhances problem-prevention capabilities
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33. Benefits of Strategic Management
Identification of opportunities
Objective view of management problems
Improved coordination and control
Minimizes adverse conditions and changes
Decisions to better support objectives
Effective allocation of time and resources
Internal communication among personnel
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34. Benefits of Strategic Management
Integration of individual behaviors
Clarifies individual responsibilities
Encourages forward thinking
Encourages favorable attitude toward change
Discipline and formality to the management of the business
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35. Why Some Firms Do No Strategic Planning
Poor reward structures
Fire-fighting
Waste of time
Too expensive
Laziness
Content with success
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36. Why Some Firms Do No Strategic Planning (Cont’d)
Fear of failure
Overconfidence
Prior bad experience
Self-interest
Fear of the unknown
Suspicion
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37. 4 Phases of Strategic Management
Basic Concepts of Strategic Management
4 Phases of Strategic Management
Firms evolve through the following faces of strategic management.
Basic financial planning
Forecast-based planning
Externally-oriented planning
Strategic management
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38. Basic Concepts of Strategic Management
Basic financial planning: initiate some planning when they requested to set up their budgets; considers activities for one year.
Forecast-based planning: consider projects for more than a year. The time horizon is usually 3-5 years. Extrapolate current trends in the future.
Externally-oriented planning: conduct strategic planning by top management and they leave implementation to low level.
Strategic management: planning by forming a team from all levels in the company.
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39. Organization “fit” with environment
Organizational Adaptation
Organization “fit” with environment
Theory of population ecology\biology: org. unable to adapt to changing conditions, because lack of interest in change.
Institution theory: org. can adapt to changes by imitating others.
Strategic choice perspective: not only adapt to changes but also it can reshape its environment.
Organizational learning theory:
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40. Strategic flexibility
Organizational Adaptation
Strategic flexibility
Demands long-term commitment to development of critical resources
Demands firm become a learning organization
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41. Learning Organizations
An organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights
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42. Triggering events to change in strategy
New CEO
External intervention e.g., from banks.
Threats of change in ownership.
Performance gap.
Strategic inflection point.
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43. Rare: unusual, no precedent to follow.
Strategic Decision Making
Strategic Decisions
Rare: unusual, no precedent to follow.
Consequential : require substantial resources and commitment from all.
Directive: set precedent for future action.
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44. Strategic Decision Making
Top managers tend to use one of four modes/approach of strategy formulation:
Mintzberg’s Modes
Entrepreneurial mode
Adaptive mode
Planning mode
Logical incrementalism
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45. Mintzberg’s Modes
Entrepreneurial mode: the strategy is made by powerful individual. The focus on opportunities.
Adaptive mode: using reactive solution rather than proactive.
Planning mode: it uses reactive and proactive mode. Data gathering and analysis and select strategies.
Logical incrementalism: strategy is set based on a series of incremental commitment rather than through global formulation of total strategies. This suitable when environment is changing rapidly.
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46. 5 Elements of Good Strategy
Hambrick and Fredrickson – Good Strategy
5 Elements of Good Strategy
Arenas
Vehicles
Differentiators
Staging
Economic logic
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