2 Key concepts in SM.ppt
- 1. Key concepts in strategic management
- 2. Some Key strategic management concepts/terms • Business definition-the satisfaction or utility customers obtain from the firms products or services Strategic vision -a view of an organizations future direction and business course. it is a guiding concept for what the organization is trying to do and to become. It is a big picture perspective of the organization It shows where the organization is headed
- 3. Vision statement- A statement of the kind of organization that top management is trying to create Mission-is a fundamental unique aim or purpose that sets an organization apart from others of its kind Characteristics of a mission Should bring out the major competitive scopes (industry, market segment scope, geographical scope) It should be motivating
- 4. • Core values-are the standards laid out by the organization in terms of how it will treat its customers, share holders, work force, community, etc. Values guide the behaviour of all staff in the organization • Purpose- a long term, broad guiding focus that does not change which provides the broadest contest for redefining the business over time as the environment changes (it is defined by the customers) Goals-are defined as open ended statements of planned accomplishments. Goals are directly derived from the mission of the company Strategic objectives- are specific performance targets or results to be achieved within a certain time frame. Objectives convert the goals into targeted results. They can be both long term(3-4 yrs) or short term(1-2 yrs) Objectives especially the short term objectives should be SMART
- 5. Why long term goals and objectives? To ensure achievement of sustained growth and profitability Areas where a firm may develop goals and objectives: Profitability Customer orientation Productivity Internal structuring Competitiveness Physical and financial resources Employee development, etc
- 6. Driving force-the company's most fundamental focus Environmental analysis Key success factors –are those factors that drive the growth of the industry- essential features within the industry for success
- 7. Internal appraisal-is a description of the situation within the organization (S&W) Stretch-a strategic planning period adopted by an organization Strategic intent-a statement of the desired leadership position that an organization wishes to achieve. A corporate ambition or challenge Competitive advantage- internal factor that enables a firm to have market superiority or leverage over its competitors on a sustainable basis.
- 8. Strategy-it is a means of accomplishing or achieving organizational objectives A course of action to achieve the stated goals and objectives Actions that a company will take to increase its competitive advantage Is a unified, comprehensive and integrated plan that relates the strategic advantages of a firm to the challenges in the environment
- 9. Dimensions of strategy A strategy as a plan: course of action, a guideline to deal with a situation A strategy as a ploy- i.e a maneuver to win competitors A strategy as a pattern i.e. a series of consistent actions/activities A strategy as a position- a means of locating an organization in the environment/market A strategy as a perspective-it unites an organization by a common thinking towards achieving common goals
- 10. Sources of competitive Superior skills Superior resources Superior position Customer service Continuous innovation Superior technology Superior quality
- 11. Strategic competition: Competing for long term survival. Competing with a long term orientation Strategic thinking-long term thinking. Looking a head, and plotting what to do to survive. Seeing a big picture. Building scenarios of the future and plotting backwards to see how your present actions can influence the future Competitive exclusion-the argument that no two firms can co-exist if they make their living in an identical way