1. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -1 Art & science of formulating, implementing, and evaluating, cross-functional decisions that enable an organization to achieve its objectives Strategic Management –Defined

2. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -2 3 Stages of the Strategic Management Process Strategy formulation Strategy implementation Strategy evaluation

3. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -3 Vision & Mission Strategy Formulation External Opportunities & Threats Internal Strengths & Weaknesses Long-Term Objectives Alternative Strategies Strategy Selection

4. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -4 Strategy Implementation Annual Objectives Policies Employee Motivation Resource Allocation

5. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -5 Strategy Evaluation Internal Review External Review Performance Measurement Corrective Action

6. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -6 Organizations should continually monitor internal and external events and trends so that timely changes can be made as needed Adapting to Change

7. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -7 Anything that a firm does especially well compared to rival firms Strategic Management is Gaining and Maintaining Competitive Advantage

8. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -8 Vision Statement – What do we want to become? Mission Statement – What is our business? Vision and Mission Statements

9. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -9 External Opportunities and Threats Analysis of Trends  Economic  Social  Cultural  Demographic/Environmental  Political, Legal, Governmental  Technological  Competitors

10. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -10  Controllable activities performed especially well or poorly  Determined relative to competitors Internal Strengths and Weaknesses

11. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -11  Specific results that an organization seeks to achieve in pursuing its basic mission  Long-term means more than one year Long-Term Objectives

12. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -12 Strategies Examples  Geographic expansion  Diversification  Acquisition  Product development  Market penetration  Retrenchment  Divestiture  Liquidation  Joint venture

13. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -13 Benefits of Strategic Management

14. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -14 Benefits of Strategic Management Nonfinancial Benefits  Enhanced awareness of threats  Improved understanding of competitors’ strategies  Increased employee productivity  Reduced resistance to change  Clearer understanding of performance-reward relationship  Enhanced problem-prevention capabilities

15. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -15 Why Some Firms Do No Strategic Planning Lack of knowledge of strategic planning Poor reward structures Fire fighting Waste of time Too expensive Laziness Content with success

16. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -16 Why Some Firms Do No Strategic Planning (continued) Fear of failure Overconfidence Prior bad experience Self-interest Fear of the unknown Honest difference of opinion Suspicion

17. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Ch 1 -17 Comparing Business and Military Strategy Strategic planning started in the military Similarity  Both business and military organizations must adapt to change and constantly improve Difference  Business strategy assumes competition  Military strategy assumes conflict