Chapter 1

The Nature of Strategic

Management

MK – Management Stratigic
DOSEN : Dany P.Hutomo SE,MM
Pertemuan ke 1

Text book: Strategic Management: Concepts and Cases. 9th edition Fred R. Davida
and other sources Ch. 1-1
Internal used only
 Defining Strategic Management

Definisi dari strategic management adalah sebuah

keterampilan/ ilmu yang menerapkan formulasi,
implementasi, dan evaluasi cross-functional decision
yang dapat memampukan perusahaan untuk
mencapai goalnya.

Gagasan penting dari strategic management:

“Achieve and maintain competitive advantage.”

Competitive advantage refers to factors that allow a company to produce

goods or services better or more cheaply than its rivals. These factors
allow the productive entity to generate more sales or superior margins
compared to its market rivals.
Strategic Management = Strategic Plan.

Strategic Planning yang terdiri atas formulasi, implementasi,

dan evaluasi adalah mengeksploitasi dan menciptakan
sebuah opportunity di masa yang mendatang.

Sebuah perusahaan harus memiliki sebuah good strategic

plan untuk dapat untuk berkompetisi dengan baik, sesuai
dengan gagasan penting strategic management di atas.

Sebuah strategic plan dihasilkan dari sebuah pembentukan

managerial choice yang cukup rumit dari banyaknya good
alternatives untuk perusahaan.
Three important questions to answer in
developing strategic plan:
1. Where we are now
2. Where does we want to go
3. How are we going to get there
 Strategic Management Achieves
Organizational Success
Process of Integrating:
– management
– marketing
– finance/accounting
– production/operations
– research and development
– computer information systems
Ch. 1-17
Fred R. David
Prentice Hall
Three-Stage Process

 Strategy Formulation

 Strategy
Implementation

 Strategy Evaluation
Ch. 1-18
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A Comprehensive Strategic-
Management Model
 The Nature of Strategic
Management

• A global perspective is a matter of

survival for businesses.
• E-commerce is a vital strategic
management tool.
• The natural environment is an important
strategic issue.

Ch. 1-20
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Prentice Hall
 Strategy Formulation

 Vision & Mission

 Opportunities & Threats

 Strengths & Weaknesses

 Long-Term Objectives

 Alternative Strategies

 Strategy Selection

Ch. 1-21
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 Strategy Formulation

Issues include:
– What new businesses to enter
– What businesses to abandon
– How to allocate resources
– Expand operations or diversify
– Enter international markets
– Merge or form joint venture
– Avoidance of hostile takeover
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 Strategy Implementation

 Annual Objectives

 Policies

 Employee Motivation

 Resource Allocation

Ch. 1-23
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 Strategy Implementation

Action Stage of strategic management:

– Most difficult stage
– Mobilizing employees and managers
– Interpersonal skills are critical
– Consensus on pursuing goals

Ch. 1-24
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 Strategy Evaluation

 Internal Review

 External Review

 Performance Measurement

 Corrective Action

Ch. 1-25
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 Strategy Evaluation

Final stage of strategic management:

– All strategies subject to future modification
– Success today is no guarantee of success
tomorrow
– Success creates new and different problems
– Complacency leads to demise

Ch. 1-26
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 Prime Task of Strategic
Management

According to Peter Drucker…

The prime task is to think through the
overall mission of a business
Ask the question:
What is our Business?

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Prentice Hall
 Integrating Intuition and Analysis

The strategic management process

attempts to organize quantitative and
qualitative information under
conditions of uncertainty.

Ch. 1-28
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 Integrating Intuition and Analysis

Intuition based on:

– Past experiences
– Judgment
– Feelings
Useful for decision making
– Conditions of great uncertainty
– Conditions with little precedent
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 Integrating Intuition and Analysis

Intuition and judgment

– Management at all levels
– Analyses are influenced

Analytical thinking and intuitive thinking

– Complement each other

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 Adaptation to Change

Organizations must monitor events

– On-going process
– Internal and external events
– Timely changes

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 Adaptation to Change

Rate and magnitude of changes

– Increasing dramatically
• E-commerce
• Demographics
• Technology
• Merger-mania
– Effective Adaptation
• Long-run focus
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 Adaptation to Change

Key strategic-management questions:

– What kind of business should we become?
– Are we in the right fields?
– Should we reshape our business?
– What new competitors are entering our
industry?
– What strategies should we pursue?
– How are our customers changing?
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 Key Terms

Strategists
– Most responsible for success or failure of an
organization
– Various job titles:
• Chief executive officer
• President
• Owner
• Chair of the Board
• Executive Director
• Entrepreneur
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 Key Terms

Vision Statement
– What do we want to become?

Mission Statement
– What is our business?

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 Key Terms

External Opportunities and Threats

– Significantly benefit or harm the organization in the
future.

– Include the following trends:

• Economic
• Social
• Cultural
• Demographic Environmental
• Political, legal, governmental
• Technological
• Competitive trends
Ch. 1-36
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 Key Terms

External Opportunities and Threats

– Largely beyond the control of a single
organization.

– Basic tenet of strategic management

• Strategy formulation to:
– Take advantage of external opportunities
– Avoid or reduce impact of external threats
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 Key Terms

Environmental Scanning

– Industry Analysis
• Process of conducting research and
gathering and assimilating external
information

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 Key Terms

Internal Strengths and Weaknesses

– Controllable activities performed especially
well or poorly.

– Arise in functional areas of the business:

• Management
• Marketing
• Finance/accounting
• Production/operations
• Research & development
• Computer Information Systems
Ch. 1-39
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 Key Terms

Determining Internal Factors:

– Financial ratios
– Measuring performance
– Industry averages
– Survey data

Ch. 1-40
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 Key Terms

Long-term objectives:

– Mission-driven pursuit of specific results more

than one-year out.
– Essential for organizational success
• State direction
• Aid in evaluation
• Create synergy
• Focus coordination
• Basis for planning, motivating and controlling
Ch. 1-41
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 Key Terms

Strategies:
– Means by which long-term objectives will be
achieved.

– May include:
• Geographic expansion, diversification
• Acquisition
• Product development, market penetration
• Retrenchment, divestiture
• Liquidation, joint venture

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 Key Terms

Annual Objectives:

– Short-term milestones that organizations must

achieve to reach long-term objectives.

Policies:

– Means by which annual objectives will be

achieved.
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TERIMAKASIH, SAMPAI JUMPA