1. UNIT 1: THE CHARACTER OF STRATEGIC MANAGEMENT

2. 2 A. Strategy Strategy is about winning. It is a unifying theme that gives coherence and direction to the actions and decisions of an individual or organization Strategy is not purely a matter of intuition and experience. Analysis does play a role in the strategy process of a company

3. 3 Strategy guides organizations to superior performance through establishing competitive advantage Strategy also acts as a vehicle for communication and co-ordination within organizations Strategic management is about performance of organizations

4. 4 B.Elements of successful strategies Objectives that are simple, consistent and long-term - Single-mindedness of goals - Unity of purpose - Long-term focus

5. 5 Good understanding of the competitive environment -Appreciation of the dynamics of competition -Competition influences choice of strategy

6. 6 Objective appraisal of resources -Understanding strengths and exploiting them - Understanding weaknesses and protecting the organization against them

7. 7 Effective implementation -Strategy and structure -Strategy and leadership, culture and other internal organizational variables -Mckinsey 7s framework

8. C.Red Ocean and Blue Ocean Strategy Red Ocean Strategy Compete in existing market space. Beat the competition. Exploit existing demand. Make the value/cost trade-off. Align the whole system of a company’ activities with it strategic choice of differentiation or low cost. 8

9. Blue Ocean Strategy Create uncontested market space. Make the competition irrelevant. Create and capture new demand. Break the value/cost trade off. Align the whole system of a company’s activities in pursuit of differentiation and low cost. 9

10. 10 D. Strategy Approaches: Design Versus Process The Design School -The strategy process is a logical one -Strategy is formulated through rational analysis of the organization -Strategy is then communicated and implemented throughout the organization

11. 11 The picture painted above is unrealistic: -The strategy process is less structured -The dichotomy of formulation and implementation is less apparent in practice -Strategy encompasses more than rational considerations

12. 12 The Process School -Strategies are not developed by senior managers and then communicated to everyone for implementation -It is unrealistic to separate strategy formulation from strategy implementation -Strategy is constantly adjusted in light of experience

13. 13  This approach to strategy tends to downplay the role of systematic analysis in the strategy process. There is instead greater emphasis on intuition and experience

14. 14 Mintzberg distinguishes between intended, realized and emergent strategy -Intended Strategy is strategy as conceived by management -Emergent strategy is strategy that becomes apparent through passage of time i.e. after the events it governs -Realized strategy is the strategy that is observed. It is influenced by both intended and emergent strategy

15. 15  The design and process schools individually offer only partial explanations about strategy

16. 16 E.Taylor (1995): The New Strategic Leadership: Driving Change, Getting Results Strategic management (= Strategic leadership) is about managing radical change to achieve dramatic improvement in performance. Strategic management is key to survival in a turbulent business environment. No industry or company seems able to escape the winds of change. Effective strategic management appears to be the answer to companies in effectively coping with changing environments.

17. 17 Contemporary Issues Knowledge management Value-based management Governance Transformational leadership Ethics