Professional Documents
Culture Documents
Strategy Formulation Topic 1: The Concept of Strategy and the Strategic Management Process
Lecture Plan
What is a strategy? The strategic management process Why strategic management is an ongoing process Who performs the tasks of SM? Benefits of a strategic approach
What is a strategy?
determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals
Chandler
Operating
Uniting the strategy-making effort through vertical and horizontal linkages. Co-ordination through mutually reinforcing vision, objectives & strategies.
SWOT ANALYSIS
Formulate Strategies
Analyze Resources
Implement Strategies
Evaluate Results
Management, Robbins, S. & Coultar, M. 1996p. 259
Strategy making is an ongoing process Boundaries between tasks:conceptual not real Managers have many other responsibilities Crafting/ implementing happens erratically
Chesire Puss she (Alice) began ... Would you please tell me which way I ought to go from here That depends on where you want to get to, said the cat. Lewis Carroll
If you dont know where youre going, any old road will take you there. Anonymous
Mission
Defines the current boundaries Defines the business position -Who are we? - What do we do?
Present
Objectives
Strategic vs. Financial? Long range vs. short range?
Financial
focus is on financial performance
eg. acceptable profit margin/ ROI
Measurable
Objectives must be measureable
eg. growth in market share of 5%
External
Society political regulatory Industry Opportunity Attractive- threat ness
Evaluation Choice
Craft a Strategy
Strengths weakness
Culture
Internal
Industry Attractiveness
Strategy must be matched to industry and competitive conditions eg.
technology shift change in cost structure of industry
resources
values/ ambitions ethics
Performance test
leads to superior performance
profitability long term business/ market position strength