Strategic Management: Chapter Eight Dr. Burton

Strategic Management
Chapter Eight Dr. Burton
Schermerhorn - Chapter 8
If you dont have a map, any route you take will get you where you are going. Peter Drucker
If a man take no thought about what is distant, he will soon find sorrow near at hand. He who will not worry about what is far off will soon find something worse than worry. Confucius
Strategic Planning
What is the strategic management process?
External environment analysis Internal environment and strategic direction SWOT analysis Formulation, Implementation and Control
Strategic Management Process

External and Internal Environmental
Analysis Strategic Direction Strategy Formulation Strategy Implementation and Control Strategic Restructuring
Schermerhorn - Chapter 8 4
Strategy and Strategic Management

Strategy and Competitive Advantage Strategy is an action focus that links an organization to its environment

The Strategic Management Process the process of formulating and implementing strategies to advance an organizations mission and objectives and secure competitive advantage

The Strategic Management Process Strategy formulation (Drucker)
What is our business mission? Who are our customers? What do our customers consider value? What have been our results? What is our plan?

The Strategic Management Process Strategy implementation
putting plans into action

Analysis of Mission, Values, and Objectives Mission statement
domain
customers products and/or services location
philosophy

Analysis of Mission, Values, and Objectives Strategic constituencies analysis
assessment of how well the organization serves stakeholders
10

Analysis of Mission, Values, and Objectives Core values
broad beliefs about what is/is not appropriate
Objectives
direct activities toward key and specific results
11
SWOT
Opportunities
Weaknesses
Strengths
Threats

Analysis of Organizational Resources and
Capabilities SWOT analysis

Organizational
Strengths Weaknesses
Environmental
Opportunities Threats
Situation Analysis (SWOT)

Strengths What resources and capabilities do you possess that can lead to a competitive advantage for position and market share in the industry?
14

Weaknesses
What resources and capabilities do you
not possess, but are necessary to compete for position and market share in the industry?
15

Opportunities
Conditions in the external environment that
that allow you to take advantage of your strengths, overcome your weaknesses or neutralize threats.
16

Threats
Conditions in the external environment that
may stand in the way of achieving corporate goals and objectives.
17
Strategies Used by Organizations

Levels of Strategy corporate business functional
18

Types of Strategies growth
concentration diversification
19

Types of Strategies retrenchment (defensive)
turnaround divestiture liquidation
20

Types of Strategies stability combination
used by large and complex organizations
21
Strategy Formulation
Opportunities for Competitive Advantage Cost and quality Knowledge and timing Barriers to entry Financial resources
22
Boston Consulting Group (BCG) Matrix ties strategy formulation to analysis of business opportunities according to market growth rate and market share
stars cash cows question marks dogs
Portfolio Planning investing scarce organizational resources among competing business opportunities
24
Porters Five Competitive Forces

New Entries
Industry Environment
Suppliers
Direct Competition
Buyers
Substitutes
Competition
The healthcare industry: Complex Highly competitive High tempo of change External Environment Highly demanding consumers, Government
regulation New entries

Group practice, Ambulatory centers
Competition (cont)
Buyers Employers Health plans Suppliers Physicians Health plans Substitutes Generic Rx Alternative health care
Porters Competitive Strategies Model new competitors bargaining power of suppliers bargaining power of customers threats of substitute products and services competition between existing companies
28
Porters Competitive Strategies Model Strategies to Gain Competitive Advantage
differentiation cost leadership focus
29
Business Strategy (Domain and Navigation)

Low-Cost leadership (volume discounts)
Differentiation (set apart from other
competitors) Focused (a niche market combining differentiation and low-cost leadership)
30
Corporate Strategy (Domain) Specialization/niche Vertical integration (forward and backward) Horizontal integration Diversification Retrenchment or divestiture Strategic alliances (joint ventures, mergers and consolidations)
31
Product Life Cycles Stages
introduction growth maturity decline
32
Emergent Strategies develop progressively over time
Logical incrementalism strategies that develop as modest adjustments to past patterns
33
Strategy Implementation
Strategic Management Failures Substance
inadequate attention to major strategic planning elements
Process
poor handling of strategy implementation
34
Strategy Implementation
Leadership and Top Management Teams effective strategy implementation depends on all managers Corporate Governance boards of directors
inside outside
35
Strategy and Entrepreneurship

Who are the
Entrepreneurs?
Risk-taking individuals who pursue opportunities that others do not see
36

Typical Characteristics of
Entrepreneurs
internal locus of control high energy level high need for achievement tolerance for ambiguity self-confidence action oriented

Entrepreneurship and Small Business Small business
fewer than 500 employees most common type of business in the U.S. high failure rate
38

Small Business Development Small Business Administration (SBA)
Small Business Development Centers
offer guidance on how to run a business successfully
39

Entrepreneurship and Large
Enterprises
intrapreneurship
entrepreneurial behavior within large organizations
skunk works
groups of employees work in a creative setting

Strategic Management: Chapter Eight Dr. Burton

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Strategic Management

Chapter Eight Dr. Burton

Strategic Management Process

Strategy and Strategic Management

Strategy and Strategic Management

Strategy and Strategic Management

Strategy and Strategic Management

Strategy and Strategic Management

Strategy and Strategic Management

Strategy and Strategic Management

Strategy and Strategic Management

Capabilities SWOT analysis

Situation Analysis (SWOT)

Situation Analysis (SWOT)

Situation Analysis (SWOT)

Situation Analysis (SWOT)

may stand in the way of achieving corporate goals and objectives.

Strategies Used by Organizations

Strategies Used by Organizations

Strategies Used by Organizations

Strategies Used by Organizations

Porters Five Competitive Forces

regulation New entries

Business Strategy (Domain and Navigation)

competitors) Focused (a niche market combining differentiation and low-cost leadership)

Strategy and Entrepreneurship

Strategy and Entrepreneurship

Strategy and Entrepreneurship

Strategy and Entrepreneurship

Strategy and Entrepreneurship

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