1. 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.

2. 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.

3. 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.

4. 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
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5. Exhibit 1-1: Military Strategy
Internal
External
Match
Special
capabilities
Battle
terrain
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6. Corporate Variety in Fast Foods
McDonald’s
Hamburgers
Brinker International
Gourmet hamburgers and similar cuisines
Tricon Global Restaurants
Non-hamburger cuisines
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7. 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.

8. 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.

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

10. 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.

11. 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.

12. 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.

13. Characteristics of Strategic Decisions
Large financial outlay
Long-term impact
Controversial nature
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14. Who Are Strategic Managers?
Business Managers
Manage and operate a single line of business
Corporate Managers
Oversee and manage a portfolio of businesses
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15. Key Stakeholders Organization Shareholders Senior Managers Customers
Communities
Employees
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16. Difficulties in Dealing With Stakeholders
Legal Obligations
Societal Expectations
Personal Standards
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