STRATEGIC MANAGEMENT

Session 1: INTRODUCTION

INTERNATIONAL BUSINESS STUDIES (WPBS)

Strategic Management – Introduction
(plan for today’s session)
1. Strategic Management and Strategic Thinking -
definitions
2. Business Strategy – context, content, process
3. Strategic versus Tactic decisions
4. Perspective and Emergent strategies
5. Levels of corporate strategy
The understanding

Strategic Management
and Strategic Thinking
Looking for the roots of strategic thinking
Looking for the roots of strategic thinking
Contemporary approach
to Strategic Thinking in Business
Context, Content, Process

Business Strategy
What Is Strategy?

‘Business strategy is the broad collection

of decision, rules and guidelines
that define a business’ scope and growth
direction.’

Ansoff, HI, Corporate Strategy 1965

(C) prof.dr hab. Aneta Zelek

What does STRATEGY mean?
An American View…
Four „P” model by H. Mintzberg

Henry Mintzberg. The Rise and Fall of Strategic Planning (1994).

(C) prof.dr hab. Aneta Zelek

What does STRATEGY mean?
A British View…
Johnston and Scholes
"Strategy is the direction and scope of an organisation
over the long-term: which achieves advantage for
the organisation through its configuration of resources
within a challenging environment, to meet the needs of
markets and to fulfil stakeholder expectations".

Johnson and Scholes (Exploring Corporate Strategy)

(C) prof.dr hab. Aneta Zelek

 What is the difference?

Strategic versus Tactic decisions

Managing in the hierarchy
of organizations

Top Management Strategic Management

(Executives)

Tactical Management
Middle
Management

First – level Operational Management

Management

(C) prof.dr hab. Aneta Zelek

 Strategy – Tactics – Operation
The level of management
(hierarchy)
Strategic
decisions

Tactical decisions

Operational decisions

t he Number of problems, aspects -

g
sin complexity
ne
f lu
f in on
e o at i
m is
Ti gan
or
 STRATEGIC - TACTICAL – OPERATIONAL
decisions
1) Strategic decisions are characterized with a long time of
bringing to light themselves results (often irreversible), with
the lot of the complexity and that are undertaken on the highest
level of the organizational hierarchy
2) Tactical decisions embrace segments of strategic decisions,
are less complicated and compound, more quickly influence on
the organization and are undertaken on the middle-level
management
3) Operational decisions fill these preceding with the
content, refer single problems, bring to light their results
double-quick and are undertaken on the lowest level of the
organization hierarchy

(C) prof.dr hab. Aneta Zelek

 The difference between
STRATEGY and TACTICS
Aspects Strategic decisions Tactical decisions

Scale of the Objective

Grand Limited

Scope of the Action

Broad and General Narrowly Focused

Degree of Complexity
Very complex – hard to adapt in
Simple, quick to adjust and adapt
the short time

Timing in Relation to
Action Before Action During Action

Time of influencing the

organisation
Very long Short or middle time

The competence to
manage Top Management Middle management

(C) prof.dr hab. Aneta Zelek

 Business
Corporate
Functional

Levels of corporate strategy

Talking about strategy we can use the
term STRATEGY three times
 At first – CORPORATE STRATEGY
 Secondly – BUSIENSS STRATEGY
 Third – FUNCTIONAL (OPERATIONAL)
STRATEGY

(c) prof. dr hab. Aneta Zelek

Three levels of strategy

CORPORATE
STRATEGY CORPORATION

BUSINESS SBU 1 SBU 2 SBU 3

STRATEGY

FUNCTIONAL FINANCE MARKETING HR IT

STRATEGY
Three levels of the strategy
 Corporate Strategy - is concerned with the overall purpose
and scope of the business to meet stakeholder expectations.
This is a crucial level since it is heavily influenced by investors
in the business and acts to guide strategic decision-making
throughout the business. Corporate strategy is often stated
explicitly in a "mission statement".
 Business Unit Strategy - is concerned more with how a
business competes successfully in a particular market. It
concerns strategic decisions about choice of products, meeting
needs of customers, gaining advantage over competitors,
exploiting or creating new opportunities etc.
 Functional Strategy - is concerned with how each part of the
business is organised to deliver the corporate and business-unit
level strategic direction. Functional strategy therefore focuses
on issues of resources, processes, people, finance etc.

(c) prof. dr hab. Aneta Zelek

The Corporate Strategy has a primary meaning for SBU’s strategies.
Functional strategies are to facilitate the both levels of strategy
Final conclusions
 SBU’s in PEPSI
PepsiCo has hundreds of brands around the
globe. These are some of the best known.

(c) prof. dr hab. Aneta Zelek

Ford Motor Company
offers a wealth of variety to the automotive consumer. As we start our second
century of business, we are in a position to appeal to the widest range of potential
customers. Each of our automotive brands has a unique personality and holds a
distinct place in the Ford Motor Company family.

(c) prof. dr hab. Aneta Zelek

 The Genius Corporate Strategy
by Jack Welsh

„Our strategy is to be a leader

on each market we serve.”
J. Welsh ‘80

‘1980 - 158 SBUs ‘1995 - 12 SBUs

Market capitalisation
1980 - 19 mld $
Market capitalisation
1995 - 510 mld $

(c) prof. dr hab. Aneta Zelek


GE Commercial Finance provides loans,
operating leases, financing programs,
commercial insurance, and an array of other
products and services aimed at enabling
business worldwide to grow.
GE Infrastructure is one of the world's
leading providers of fundamental
technologies to developing countries,
including aviation, energy, oil and gas, rail
and water process technologies.
GE Healthcare is a leader in the
development of a new paradigm of
patient care dedicated to detecting
disease earlier and helping physicians
tailor treatment for individual patients.
(c) prof. dr hab. Aneta Zelek
Market capitalisation value
2010 - 590 mld $
GE Industrial provides a broad range of
products and services throughout the
world, including appliances and lighting;
plastics and silicones products; and
equipment services.
NBC Universal is one of the world's leading
media and entertainment companies in the
development, production and marketing of
entertainment, news and information to a
global audience.
GE Money, formerly known as GE
Consumer Finance, is a leading
provider of credit services to
consumers, retailers and automotive
dealers around the world.
 Two completely different
philosophies

Perspective and Emergent strategies

Do you agree?
 SOME PEOPLE THINK THE FUTURE IS
PREDICTABLE AND SUCCESS IS A MATTER OF
DESTINY
Perspective (Synoptic) philosophy
Do you agree?
 SOME OTHER PEOPLE THINK THE FUTURE IS
CHAOTIC AND UNPREDICTABLE AND SUCCESS IS
A PURE MATTER OF CHANCE
Emergent (Incremental) philosophy
Your homework
ON THE E-LEARNING PLATFORM
 Case study on PERSPECTIVE and EMERGENT
STRATEGIES:
 Singapore Airlines or
 Virgin Group
 (to be chosen)
 DEADLINE - 10.03.2013