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The Basic Concepts Of Strategic Management

Point (1) :- We must distinguish between business policy and strategic

management

Business policy Strategic management:-

general management orientation that A set of managerial decisions and actions
looks inward for properly integrating that determines the long- run performance
the firms functional activities ‫ التركيز فقط‬of a firm. ‫ على جوه وبره‬$‫التركيز‬
‫ الشركه الداخليه‬$‫على أقسام‬

Initially, strategic management was of most use to large corporations operating in

multiple industries that:-
 Increasing risks of error ‫زياده معدل االخطاء‬
 Costly mistakes ‫االخطاء المكلفه‬
 Economic ruin, ‫الكساد االقتصادى‬

Four phases of strategic management.

Phase (1) :- Basic - Managers initiate serious planning when they are requested to propose next years
financial planning ((budget)) ‫لما يطلب منهم‬
- Projects are proposed with very little analysis and most information coming from
the firm. ‫كل المعلومات من جوه الشركه‬
-
- Normal company's activities are often suspended for weeks while managers try to
cram ideas into the proposed budget. ‫يقعدوا اسابيع‬
- The time horizon is usually one year. ‫التخطيط السنه بسنتها‬
Phase (2):- forecast As annual budgets become less useful, managers attempt to propose 5 years
based planning :- plans based on internal information, managers gather any available environmental
data usually on an ad- hoc basis and extra palate current trends five years into the
future.
The time horizon is usually three to five years. ‫التخطيط لمده خمس سنين اعتمادا على بيانات قديمه‬
‫فى الشركه‬
Phase (3) :- Frustrated with highly in efficient 5 years plans the top managers takes control or
Externally oriented planning process by initiating strategic management
strategic planning
The company seeks to increase its responsiveness to changing markets and
competition by thinking strategically.
Planning is taken out or hands of lower level managers. ‫التخطيط بيتم فقط عند المدير االعلى‬
‫بعيدا عن المستويات اللى تحت‬

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 Consultants often provide the sophisticated and innovative techniques that the
planning staff tries to gather information and forecast future trends . ‫كان فى اعتماد‬
‫على المستشارين والخبراء‬
-
- Top management planning emphasis formal strategy formulation and
implementation issues to lower management level. ‫اللى فوق يخطط واللى تحت ينفذ‬

Phase (4) :- Realizing that even the best strategic plan are worth less without less the input
strategic and commitment of lower mangers.
management :-
Top management forms planning groups of managers and key employees at
many levels forms various department and work groups, they develop and
integrate a series of strategic plans aimed at achieving the company primary
objectives.

Strategic plans at this point detail the implementation. Evaluation and control
issues.

At this point the strategic planning transited to strategic thinking so, the planning
no longer top- down process. ‫كل الناس من كل المستويات بتشارك فى التخطيط والتنفيذ‬

Benefits of strategic management:-

1- Cleaner sense of strategic vision for the firm. ‫الرؤيه المستقبليه‬

2- Sharper focus on what strategically important ‫تحديد االولويات االهم ثم المهم‬
3- Improved understanding of a rapidly changing environment
4- Improved organizational performance ‫تحسن أداء المنظمه‬
5- Achieve a match between the organizations environment and its strategy,
structure and processes.
6- Important in unstable environments
7- Strategic thinking
8- Organizational learning.

Note that:-
- strategic management need not always be formal process and
simply answer 3 important questions:- ‫االداره االستراتيجيه مش الزم تكون رسميه‬
A- Where is the organization now? Not where do we hope it is
B- If no changes are made, where will the organization be in 1 year, 2 years, 5 years, and 10
years?
C- What specific actions should management under take? What are the risks and profits
involves?

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 Point (2) :- challenges to strategic management :- ‫التحديات اللى بتواجهه االداره االستراتيجيه‬
A) Globalization:- is the integration and internationalization of markets and
corporations that changed the way the modern corporations do business to reach
economic of scale to achieve low costs and low prices needed to be competitive ‫العولمه‬
‫وانفتاح العالم‬

 Impact of globalization :-
1- Companies now thinking of global market instead of local market, ex: Nike
and Reebok manufacture their athletic shoes in various countries throughout Asia for sale
on every continent.
2-
3- Strategic management is becoming an important way to keep track on
international development and position the companies for long term competitive
advantage.

4- International considerations hare led to the strategic alliance ex: British

airways and American airlines and to the merger between Daimler Benz and Chrysler
corporation.

5- The formation of regional trade associations and agreements such as:-

European union
NAFTA ((North American Free Trade Area))

Electronic Commerce:-
Definition: - the use of internet to conduct business transactions.

Environmental sustainability:- ‫االستمرار البيئى‬

6- Environmental sustainability:- refers to the use of business practices to reduce
a company's impact upon the natural, physical environment.
7- ‫ الن اللى مش حيعمل كده ممكن يفقد البيزنس بتاعه‬$‫الزم كل الشركات تفكر فى الحفاظ على البيئه وعلى مواردها‬

Risks of climate change includes:- ‫المخاطر اللى ظهرت نتيجه تغير المناخ‬
1- Regulatory risk
2- Supply chain risk
3- Product and technology risk.
4- Litigation risk
5- Reputational risk

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6- Physical risk

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