STRATEGIC MANAGEMENT

CREATING A COMPETITIVE ADVANTAGE

►At the end of this lesson, students will be able to:

►1. Define and explain the concept of Strategic
Management
►2. Realize the importance of Strategic
Management
►3. Learn how to distinguish Vision from Mission
statement
DEFINITION OF STRATEGIC
MANAGEMENT
- Is a set of managerial decisions and actions that determines the
long run performance of a company.
-Strategic Management consist of analyses, decisions and actions in
the organization in order to create and sustain competitive advantage
-Art & Science of formulation, implementing & evaluating cross
functional decisions that enable an organization to achieve it’s goal
IN ESSENCE STRATEGIC PLAN IS A
COMPANY’S GAME PLAN
4 KEY STRATEGIC MANAGEMENT
QUESTIONS

1. What kind of business would like we become?

2. Are we in the right fields?
3. Who are our competitors?
4. What strategies should we pursue?
5. How are our customers changing?
WHY IS STRATEGIC MANAGEMENT
IMPORTANT TO BUSINESS
1. Strategic management provides a strong motivation for employees
and management to achieve objectives.
2. Strategic Management serves as a basis for management control &
evaluation.
3. Strategic Management also ensures that the top executives have a
unified opinion on strategic issues and actions.
STRATEGIC MANAGEMENT ACHIEVE A
FIRMS SUCCESS THROUGH INEGRATION

►HUMAN RESOURCES
►FINANCE/ACCOUNTING
►RESEARCH & DEVELOPMENT
►SALES & MARKETING
►PRODUCTION & OPERATIONS
►MANAGEMENT INFORMATION SYSTEM
MAIN PROCESSES OF STRATEGIC
MANAGEMENT
ANALYSIS
Strategic Management is concerned with the analysis of strategic goals, Vision,
Mission and Strategic objectives along with the analysis of the internal and external
environment.

STRATEGIC DECISIONS
Decisions must relate clearly to a solutions of perceived problems how to avoid
threats and how to capitalize on an opportunity.
 Leaders makes strategic decisions. These decisions addresses 2
questions:
1. What industries should we compete in?
2. Should we compete in those industries?

ACTIONS
Determine what action must be taken? Decisions are useless, unless
they are acted upon
COMPONENTS OF STRATEGIC
MANAGEMENT
1. Create an actionable plan
2. Perform SWOT Analysis in preparation for the
implementation of the
strategy.
3. Design and implement the strategy
4. Track the progress of the implementation.
BENEFITS OF STRATEGIC
MANAGEMENT
1. Strategic Management helps organizations formulate better strategies through
the use of more systematic, logical and rational approaches.
2. Strategic Management helps management to make better decisions.
3. Through strategic management improvement in sales productivity.
4. Enhanced awareness of external threat.
5. Better understanding of competitors strategies.
6. Increased employee productivity and reduced resistance to change.
7. Clearer understanding of performance reward system.
STRATEGIC MANAGEMENT
PROCESS
Every organization needs to adopt an effective strategic
management process that will serve as a strong foundation to identify
all the resources and core competencies needed to achieve the strategic
goals and objectives.

The Strategic Management process defines the firm’s strategy and

describes how manager’s make a choice among several strategic
options for the company in order to achieve better performance.
 Strategic Management Process is a
continuous process that appraises the business
and industries in which the organization is
involved including the evaluation including the
evaluation of it’s competitors in order to re-
assess each strategy.
STRATEGIC MANAGEMENT
PROCESS
ROLE OF STRATEGIC MANAGEMENT
PROCESS
►1. Point of reference for any major decisions
►2. Helps the business to chart it’s future and move in
that direction.
►3. Assisting the business to become pro-active.
►4. Preparing the organization for any potential
challenges and explore possible opportunities
►5. Ensuring that the organizations copes with the
► competition.
►6. Helping in the identification and maximization
► of the organization’s competitive advantages
► core competencies.
BASIC MODEL OF STRATEGIC
MANAGEMENT
ENVIRONMENTAL SCANNING

►The process of gathering information about events

and their relationships within an organization
internal & external environment
BASIC PURPOSE

►The basic purpose of environmental scanning is to

help management determine the future direction of
the organization
ENVIRONMENTAL SCANNING:
INTERNAL AND EXTERNAL
WHO ARE THE INTERNAL &
EXTERNAL ENVIRONMENT
STRATEGY FORMULATION

►Is the process of deciding the best course of

action for accomplishing organizational
objectives & hence achieving organizational
purpose.
►After conducting environmental scanning
managers formulate corporate & business &
functional strategies.
►SF includes defining the competitive advantages of
the business strategy, crafting the corporate
missions, specifying achievable objectives &
setting policy guidelines
STRATEGY FORMULATION
MISSION STATEMENTS

Centers on the reason why the company exist. It

isan important communication tool that conveys
information about the company’s product, services,
target customers, market, values and future growth to
all of its stakeholders.
EXAMPLES OF MISSION

►Mc. Donalds – To be our customers favorite place

and way to eat.
►St. Lukes Medical Center – We are committed in
providing quality quality health care based on the
institute of medicine definition, safe, timely
efficient, effective, equitable, accessible & patient
centered.
VISION STATEMENTS

-Describes what the organization would like to

become in the future .

HIMMAX ELECTRONICS CORPORATION

To be the leading company nationwide in
providing excellent security systems products and
services for our customers satisfaction.
 VISION

MC DONALDS- To move with velocity to drive

profitable growth and become an even better Mc.
Donald’s serving more customers delicious food each
day around the world.
OBJECTIVE VS. GOALS

►Objectives are the specific actions & measurable

steps that you must take to reach your GOAL.
►Examples:
►Education-passing an exam is an OBJECTIVE that
is necessary to achieve your GOAL of graduating
from a university with a degree.
►CAREER
►Finishing a Masteral Degree is an OBJECTIVE on
the path of becoming a Manager which is your
GOAL.
PLV MISSION
To provide the citizens of Valenzuela an
efficient & effective institution of higher
learning that will make them skillful,
productive, competent, civic minded and God
Loving toward a peaceful, healthy and
progressive city.
A dynamic center for the development of
competent & competitive human resource as
foundation for growth and advancement of the
City of Valenzuela.
Role of External Analysis in
Strategic Planning
Selected Strategic tools
PESTEL ANALYSIS

isa framework or tools used by marketers to analyze &

monitor the macro environmental (Ext. Marketing
Environment) factors that have an impact in an
organization. The result in which is used to identify
THREAT and WEAKNESES which are used in a SWOT
analysis.
SWOT ANALYSIS
SWOT ANALYSIS

Is a strategic planning techniques used to help a

person or organization in analyzing a company’s Internal
& External environment. It is a technique use for
assessing the Strengths, Weaknesses, Opportunities &
Threats related to business competition on project
planning.
SWOT
STRENGTHS - refers to the internal conditions of the firm
where your firms excel.

WEAKNESSES - where your firm may be lacking relative to

your competitors

OPPORTUNITIES and THREATS - refers to the

environmental external to the firm
IMPORTANCE OF SWOT ANALYSIS

1. It helps you to build on what you excel

2. To address what you’re lacking
3. To minimize department risks
4. To Take the possible advantage of success
External Factors - Things which you cannot control

Market Trends - new products, technology, advancements.

Economic Trends - local, national, and international financial trends
Funding - donations, legislature, and other sources
Demography - study of age, gender, family status, income group
Relationships with suppliers and partners
Political, environmental and economic regulations.
FACTORS OF SWOT
Internal Factors - Strengths and Weaknesses refers to internal factors
which are the resources available to you.

1. Financial resources -funding, sources of income, and investment

2. Physical resources - location, facilities, equipment
3. Human Resources - Manpower
4. Access to natural resources - trademarks, patents, copyrights
5. Current process - Employees programs, Department, Hierarchies,
software system
Porters Five Forces

is a framework for analyzing a company’s competitive

environment. The number and power of a company’s
competitive rivals, potential, new market entrants,
suppliers, customer’s & substitute products that
influences a company’ profitability
PORTERS 5 FORCES ANALYSIS.

5 Forces Model conceptualized by Mr. Michael E,

Porters aims to identify and analyze the 5 competitive
forces that shapes every industry. It helps to determine an
industry’s weaknesses and strengths.