Professional Documents
Culture Documents
Chapter 1
Strategic Management
Chapter Topics
What is Strategy?
• Strategic issues
• Require top-management decisions
• Require large amounts of the firm’s resources
• Often affect the firm’s long-term prosperity
• Are future oriented
• Usually have multifunctional or multibusiness
consequences
• Require considering the firm’s external
environment
1. Corporate level
2. Business level
3. Functional level
C o rp o ra te /
b u s in e s s le v e l
Functional Level
P O M /R & D F i n a n c i a l/ M a r k e t in g H um an
s t r a te g ie s a c c o u n t in g s t r a te g ie s r e la t io n s
s t r a te g ie s s t r a te g ie s
Corporate
Corporate
strategies
strategies
Business Level
Business
Business22 Business
Business33
Business
Business11
Financial/
Financial/ Human
Human
POM/R&D
POM/R&D Marketing
Marketing
Functional Level
accounting
accounting relations
relations
strategies
strategies strategies
strategies
strategies
strategies strategies
strategies
Greater risk,cost,
and profit potential
Involve action-oriented
Functional-
Functional- operational issues
level
level
decisions
decisions Are relatively short range
and low risk
• Definition
• Degree to which participants, responsibilities,
authority, and discretion in decision making are
specified
• Forces affecting degree of formality
• Size of organization
• Predominant management styles
• Complexity of environment
• Production process
• Problems
• Purpose of planning system
Possible?
External
Internal analysis
environment
Desired?
Feedback
Feedback
Strategic analysis and choice
Long-term
Generic and grand strategies
objectives
Restructuring, reengineering
and refocusing the organization
Legend Strategic control and
Major impact continuous improvement
Minor
impact
McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.
19
Components of the Strategic
Management Model
• Company Mission
• Specifies unique purpose of company
• Identifies scope of operations
• Describes product, market, and technological areas
of emphasis
• Reflects values and priorities of decision makers
• Expresses approach to social responsibility efforts
• Internal Analysis
• Depicts quantity and quality of company’s financial,
human, and physical resources
• Assesses company’s strengths and weaknesses
• Contrasts past successes and concerns with current
capabilities to identify future capabilities
• Generic Strategies
• Low cost
• Differentiation
• Focus
• Grand Strategies
• Comprehensive, general plan of major
actions through which the firm intends to
achieve its long-term objectives in a
dynamic environment