STRATEGIC MANAGEMENT

• Kodak's story exemplifies the consequences of not adapting to disruptive technologies
• What role does strategic management play


  In promoting innovation and ensuring a company's long term competitive advantage
• Key Takeaways from Kodak Case


  • Failure to adapt to disruption
  • Underestimating Technological Change
  • Importance of Innovation
  • Focus on Long-Term Vision
  • Continuous Monitoring of Environment
• Proactive


  You do things that shouldn't have happened yet
• Strategic Management (SM)


  The process of setting objectives, developing plans, and allocating resources to achieve a sustainable competitive advantage
• Strategic management involves analyzing the internal and external environment of an organization
• Strategic management is a continuous process that adapts to changing market conditions
• Importance of Strategic Management


  • Provides directions and focus for an organization
  • Improves decision-making by considering long-term goals
  • Increases efficiency and resource allocation
  • Enhances an organization's competitive advantage
  • Fosters a culture of innovation and continuous improvement
• Strategic Management Process (AFEIC)


  • Analysis
  • Strategy Formulation
  • Strategy Evaluation
  • Strategy Implementation and Control
• Strategic Analysis: Internal Environment


  • Employee Mix
  • Management Values
  • Stakeholder Goals
  • Strategy Success
  • Corporate Culture
  • Resources
  • Capabilities
• Internal Environment Analysis Tools


  • SWOT Analysis
  • VRIO Framework
• Strategic Analysis: External Environment


  • Economic
  • Social
  • Global
  • Technological
  • Competitive
• External Environment Analysis Tools


  • PESTEL Analysis
  • Porter's Five Forces
• Strategy Formulation


  • Setting goals & Objectives (SMART goals)
  • Develop Strategic Alternatives
  • Choosing the best strategy (Considering feasibility, resource allocation, risk)
• Strategy Implementation


  • Developing Action plans
  • Resource allocation
  • Assigning responsibilities
  • Monitoring and Communication
• Strategy Evaluation and Control


  • Monitoring performance
  • Making adjustments
  • Performance measurement tools (e.g. KPIs)
• Role of Accountants in Strategic Management


  • Financial Analysis and Reporting
  • Cost management and budgeting
  • Risk assessment and management
  • Strategic planning and budgeting
  • Communication and collaboration
• Internal Analysis


  Involves a deep dive into a company's internal environment to identify strengths and weaknesses
• Strengths


  • Positive attributes that give a company an edge over its competitors
  • Tangible strengths are concrete and easily measurable, such as brand recognition, strong financial resources, or a state-of-the-art manufacturing facility
  • Intangible strengths are less tangible but equally valuable, such as a highly skilled workforce, a strong company culture, or a well-established distribution network
• Weaknesses


  • Areas for improvement
  • Operational Inefficiencies (e.g, slow production processes)
  • Lack of innovation (struggling to keep up with industry trends)
  • Limited resources (financial constraints, lack of skilled workforce)
  • High employee turnover (demotivated workforce, loss of valuable knowledge)
• Value Chain Analysis


  Breaks down a company's activities into primary and support activities to identify areas for improvement
• SWOT Analysis


  Identifies a company's Strengths, Weaknesses, Opportunities, and Threats
• VRIO Analysis


  Analyzes a company's resources to determine if they are Valuable, Rare, Inimitable, and Organized, leading to a sustainable competitive advantage
• Environmental Scanning


  The process of collecting, evaluating, and delivering information for a strategic purpose
• PESTLE Analysis Factors


  • Political
  • Economic
  • Social
  • Technological
  • Legal
  • Environmental
• Porter's 5 Forces


  A model that identifies and analyzes five competitive forces that shape every industry and helps determine an industry's weaknesses and strengths
• Porter's 5 Forces


  • Competitive Rivalry
  • Supplier Power
  • Buyer Power
  • Threat of Substitution
  • Threat of New Entry
• Porter's 5 Forces can be analyzed from different perspectives: Economic, Political Science, Sociology and Social Psychology, Management, and Applied Behavior Science or OD
• Analyzing the Task Environment

  Considers other stakeholders, their relative power, and how they impact the industry
• Factors that influence the Threat of New Entrants include economies of scale, product differentiation, capital requirements, government policy, switching costs, access to distribution channels, and cost disadvantages independent of size
• Factors that influence Rivalry Among Existing Firms include the number of competitors, rate of industry growth, product/service characteristics, amount of fixed costs, capacity, height of exit barriers, and diversity of rivals
• Substitute products are products that appear different but can satisfy the same need as another product
• Bargaining Power of Buyers


  Buyers' ability to force down prices, bargain for higher quality or more services, and play competitors against each other
• Bargaining Power of Suppliers

  Suppliers' ability to raise prices or reduce the quality of purchased goods and services
• Other stakeholders that can impact the industry include governments, local communities, creditors, trade associations, special-interest groups, unions, and complementors