2014 Cengage Learning. All Rights Reserved.

May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Every company is concerned with strategy
It determines which organizations succeed
and which ones struggle
Strategic blunders can hurt a company

Strategic management is a specific type of

planning

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 The long-term view of the organization and
competition

Thinking strategically impacts performance

and financial success

Todays environment requires everyone to

think strategically

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Decisions and actions used to formulate and
execute strategies that will provide
competitively superior fit between the
organization and its environment to achieve
organizational goals

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 Explicit strategy is the plan of action

Competitive advantage is the organizations

distinctive edge for meeting customer needs

Strategies should:
Exploit Core Competencies
Build Synergy
Deliver Value
Target Customers
2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Formulation:
Execution:
Assessing the
the use of managerial
external
and organizational
environment and
tools to direct
internal problems to
resources toward
create goals and
accomplishing
strategy
strategic results

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Formulating strategy often begins with an
audit of internal and external factors
Internal Strengths and Weaknesses
External Opportunities and Threats

Information is acquired from reports,

surveys, discussions, and meetings

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Strategic Business Units (SBUs) have a
unique mission, products, and competitors

Portfolio strategy pertains to the mix of SBUs

and product lines to provide synergy and
competitive advantage

Organizations should not become too

dependent on one business

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Organizes business along two dimensions
Business growth rate
Market share

Four categories for corporate portfolio

The combination of high/low market share
and high/low business growth

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Moving into new lines of business
Expand into new valuable products and
services
Unrelated diversification is expansion into
new lines of business
Can be a difficult strategy
Many companies are giving up on unrelated
diversification
Vertical integration expands into businesses
that supply to the business or are distributors

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Strategy within the business units: How do
we compete?
Business-level strategies are developed by
Porters Five Forces
Web technology is impacting all industries
in positive and negative ways

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Action plans used by major departments
Marketing
Production
Finance
Human Resources
Research and Development

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 Strategic Flexibility managers must be
prepared to change and adjust strategy
quickly
Strategic Partnerships collaboration with
other organizations is important
Global Strategy organizations pursue a
distinctive focus for global business

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 The final step!
Strategy is easy, but execution is hard
Most important but most difficult part
Strategy must be skillfully executed
Alignment requires all aspects of the
organization to focus on strategy goals
Everyone is moving in the same direction

2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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