1. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-1 The Strategic Management Process by Robert Pitts & David Lei Slides prepared by John P. Orr Cameron University Chapter 1

2. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-2 What you will learn… 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 Slide 1 of 2

3. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-3 What you will learn… 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 Slide 2 of 2

4. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-4 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

5. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-5 Exhibit 1-1: Military Strategy Match Internal Special capabilities Battle terrain External

6. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-6 Corporate Variety in Fast Foods McDonald’s Hamburgers Brinker International Gourmet hamburgers and similar cuisines Tricon Global Restaurants Non-hamburger cuisines

7. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-7 Exhibit 1-2: Business Strategy Strategy Internal Strength External ThreatWeakness Opportunity Apply, sustain Avert Discover Overcome

8. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-8 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

9. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-9 Strategic Management Process Analysis Formulation Implementation Adjustment/ Evaluation

10. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-10 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, guidelinesfor major activities Organization structure, systems, culture, etc. (Cycle to earlier steps) Copyright (c) 2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1- 8

11. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-11 Ex. 1-4: Multibusiness Enterprise Chairman, Pres., Exec. VPs Business #2Business #3Business #1 Marketing Manufacturing/ Operations Research and Development Business Managers Corporate Managers

12. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-12 Exhibit 1-5: Different Strategic Imperatives (1) Apply or Extend Advantage/Strength/Opportunity) Weakness/Opportunity Strength/Threat (3) Build Advantage (2) Sustain Advantage Strength Opportunity Weakness Internal External Threat

13. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-13 Characteristics of Strategic Decisions Large financial outlay Long-term impact Controversial nature

14. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-14 Who Are Strategic Managers? Business Managers Manage and operate a single line of business Corporate Managers Oversee and manage a portfolio of businesses

15. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-15 Key Stakeholders Senior Managers Organization Shareholders Customers Communities Employees

16. Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. Slide 1-16 Difficulties in Dealing With Stakeholders Legal Obligations Societal Expectations Personal Standards