Strategic Management (tips)

A) True or false 1- Strategic management is defined by five tasks:

- Developing strategic vision and mission - Establishing objectives - Crafting strategy. - Implementing strategy - Evaluating performance

2- The mission statement: - Who, What, How to Whom

- Business definition

3- The strategic vision:

- What do we want to be? - Where are we going? - Who would we be in business for?

4- Bottom up Establishing company direction (The objectives element) a- Types of objectives: Strategic Financial
Both could be either short or long term.

b- The concept of strategic intent: - The range of objectives - The levels of objectives: Top down Bottom down

Its better to have thinks working in any organization from top down simply because top management is more knowledgeable and experienced than bottom management. - Crafting

5- Crafting element: - Experience - Core competence

- know-how - Competitiveness

- Resources - Risk attitude

It is more or less similar to the planned strategy, but the changes were crafted according to the new conditions.

6- Advantages of diversification
Diversification is a form of corporate strategy (owner level decisions) The diversification will leverage the capabilities of the organization and reduce the Risk. There are 2 main reasons to diversification: - Diversification may benefit the firms owners through increasing the efficiency of the firm. - Diversification decisions may reflect the preferences of the firms managers.

7- Corporate strategy: - diversification decisions

- Performance boosting decisions - Cross-business strategic fits - Rejuvenation decisions

8- Operating strategy: - established by operating units

- Handling tasks with strategic significance - Have limited scopes - supports functional strategies

9- Bargaining power a- Supplier bargaining power:

- Weak when buyers have multi source capabilities - Weak when matched by substitutes - Weak when company being supplied is Major customer - Weak when buyer volume consumption justifies backward integration - Weak when quality and quantity are unsustainable
- Strong when considered Major supplier - Strong when buyer switching costs are high - Strong when product can be delivered cheaper than can be made

b- Buyer (customer) bargaining power:

-

Switching costs to competing brand or substitute are low Buyer numbers are low Buyers level of knowledge about product Possibility of buyer backward integration Discretion in whether and when to buy the product

10Changes in cost element is a change factor in industrys competitive structure. (External environment Analysis)

11- Group map External environment analysis (Strongest / weakest companies) Strategic group map: - Comparable product line breadth
- Sell in the same product / quality range - Use the same type of distribution channels - Have the same product attributes to appeal to similar type buyers - Depend on identical technological approach - Offer buyers similar services and technical assistance

12-

Predicting next moves External environment analysis (Rivals next moves) Competitive intelligence: - Monitoring competitors strategies
- Evaluating who the next major players will be - predicting competitors next moves

13-

The present strategy

Situational Analysis (How well is the companys current strategy working?)

- How do sales compare to market as a whole? - State of customers (old or new)? - Companys profit margins? - Trends in the companys net profits and ROI? - State of the companys overall financial strength and credit rating? - Attitudes of shareholders based on stock prices and shareholder value?

- Companys image and reputation with customers?

14- SWOT matrix SWOT analysis

Weaknesses

Overcome weaknesses to benefit from opportunities Benefit from opportunities through internal strengths

Protect weaknesses from external threats Use strengths to overcome external threats

Internal

Strengths

Opportunities External

threats

15Value chain analysis a way of viewing the organization as a chain of activities transforming inputs into outputs that beneficiaries (stakeholders) value.

B) Subject questions

1- Factor that shape companys strategy An organization is surrounded by internal and external factors.
a-

Internal factors: - Structure - Management culture - Mandates

- Operating process - Financial position

b- External factors: (PESTEL) - Political - Social - Economic - Environment - Technological - Legal

2-

Key success factors (key factors for competitive success) KSFs are the rules that shape whether a company will be financially and competitively successful. - Basis for choosing between competing brands of sellers. - Importance of product attributes. - Required resources & competitive capabilities for competitive success. - Requirement for a sustainable competitive advantage.

3- Value Chain Activities Value chain is composed into two categories: a- Primary activities:
-

Inbound logistics: Purchasing materials, fuel, parts, consumables etc.

Receiving goods from suppliers Storing and dissemination goods to concerned units Inspecting for quality Managing inventory

- Operations: Planning and implementing of projects

Production planning Product packaging Quality control and quality assurance Equipment and facilities maintenance Environment protection Preparation of internal budgets

- Outbound logistics: Physical distribution of product to buyers

Finished goods warehousing Order processing follow up Delivery vehicle dispatching Delivery fleet management and maintenance Dealer network establishment and administration

- Sales and marketing: Sales force coordination and administration

Market research and product planning Product promotion and public relations Dealer / distributor support Delivery fleet management and maintenance Dealer network establishment and administration

- Services: Buyer assistance

Parts and components delivery Maintenance and field support Technical assistance and training Customer complaints coordination After sales services

b) Support activities: - Human Resources Management: HR planning

Job analysis Recruitment and selection Orientation, training and development Career planning and guidance

Payroll management

- General administration: - Accounting: Coordination of budget preparations

Management of accounts payable and receivable Processing of invoices / vouchers Control of budgets Review of offers/ proposals / bids

- Management Information Systems:

Administering the network and the database Coordination with software and hardware suppliers Development of applicable IT solutions Supervision of systems development Conducting of systems analysis