strategic management

• Strategic business management


  The management of an organization's resources to achieve its goals and objectives
• Strategic management


  1. Setting objectives

  2. Analysing the competitive environment

  3. Analysing the internal organization

  4. Evaluating strategies

  5. Ensuring management rolls out strategies across the organization
• Strategic management

  • It is an ongoing process
  • Evaluates and controls the business and industries the company is involved in
  • Assesses competitors and sets goals and strategies to meet existing and potential competitors
  • Re-assesses each strategy annually or quarterly to determine how it has been implemented and if it needs replacement by a new strategy to meet changing circumstances
• Corporate strategy

  The highest, broadest level of strategy, applying to all parts of the firm and incorporating the longest time horizon
• Business strategy

  Concerns the actions and approaches to produce successful performance in one specific line of business
• Business strategy

  • Focuses on responding to market circumstances, initiating actions to strengthen market position, building competitive advantage, and developing strong competitive capabilities
• Functional strategies

  Include marketing, new product development, human resource, financial, legal, supply-chain, and information technology management strategies
• Functional strategies

  • Emphasize short and medium term plans, are limited to the domain of each department's functional responsibility, and are derived from broader corporate strategies
• Technology strategy

  Focuses on technology as a means of achieving an organization's overall objectives, which may include dimensions beyond the scope of a single business unit, engineering organization or IT department
• Operational strategy

  Very narrow in focus, dealing with day-to-day operational activities such as scheduling criteria, operating within a budget but not at liberty to adjust or create that budget
• Reasons why strategic plans fail

  • Failure to execute by overcoming cognitive, motivational, resource, and political hurdles
  • Failure to understand the customer
  • Inability to predict environmental reaction
  • Over-estimation of resource competence
  • Failure to coordinate
  • Failure to obtain senior management commitment
  • Failure to obtain employee commitment
  • Failure to follow the plan
  • Failure to manage change
  • Poor communications
• Strategic plans fail for many reasons, especially failure to execute and failure to understand the customer
• failure to understand the customer

  • why do they buy
  • is there a real need for the product
• inability to predict environmental reactions, like:

  • what will competitors do
  • fight brands
  • price wars
• over-estimation of resource competence:

  • can the staff, equipment and the process handle the new strategy
  • failure to develop new employee and management skills
• failure to coordinate:

  • reporting & control relationships not adequate
  • organizational structure not flexible enough
• failure to obtain senior management commitment:

  • failure to get management involved right from the start
  • failure to obtain sufficient company resource to accomplish task
• failure to obtain employee commitment:

  • new strategy not well explained to employees
  • no incentives given to workers to embrace the new strategy
• failure to follow the plan:

  • no follow through after initial planning
  • no consequences for above
• failure to manage change:

  • inadequate understanding of internal resistance to change
  • lack of vision on the relationships between processes technology and organization
• poor communications

  • insufficient information sharing among stakeholders
  • exclusion of stakeholders and delegates
• phase of strategic managements:

  1. developing a strategic vision
  2. setting objectives
  3. crafting a strategy to achieve the objectives and vision
  4. implementing and executing the strategy
  5. monitoring developments, evaluating performance, and making corrective adjustments
• importance of strategic management?

  • competitive advantage
  • achieving goals
  • sustainable growth
  • cohesive organisation
  • increased managerial awareness