LECTURE_1_INTRODUCTION_TO_STRATEGIC_MANA.ppt
- 2. INTRODUCTION to strategic management as a framework for case analysis. You will learn how to apply the stages of the strategic audit to case studies involving real organisations. INSTRUCTION and practice in the preparation and delivery of case study presentations INTEGRATION of functional analyses of the firm (that is, accounting and finance, marketing, human resource management and operations) and external macro-environmental analysis (the international business environment). These aspects of the business programme mirror the holistic nature of the actual process of strategic management. INDUCTION into the top management team: the firm is viewed long- term from board level. Purposes of the Course
- 3. A specific level of decision: Mission « what business are we in? » Strategy (quantifiable objectives) Operations/Tactics (means)
- 4. How are the firm’s objectives expressed? • Profitability • Efficiency • Growth • Shareholder Wealth • Resource Utilization • Reputation • Contribution to employees • Contribution to society • Market leadership • Technological leadership • Survival • Personal wishes of management
- 5. Structure/Culture/Resources • Structure: The way a firm is organized in terms of communication, authority, and workflow. • Culture: Pattern of beliefs, expectations, and values, shared by an organization’s members. • Resources: Assets of the firm, including skills and abilities within functional areas.
- 6. Successful Strategy Long-term, simple and agreed upon objectives Profound understanding of the competitive environment Objective appraisal of resources Effective implementation Common Elements in Successful Strategy
- 7. The Basic Framework THE FIRM Goals & Values Resources & Capabilities Structure & Systems THE INDUSTRY ENVIRONMENT Competitors Customers Suppliers STRATEGY STRATEGY Strategy: the Link between the Firm and its Environment
- 8. A Basic Model of the Strategic Management Process • Strategic Analysis: ▫ Purposes and Expectations (or, Mission & Objectives) ▫ The Environment: Opportunities & Threats! ▫ Resources, Competences, & Capabilities Strengths & weaknesses! …And culture
- 9. A Basic Model of the Strategic Management Process • Strategic Choice: ▫ Corporate (and diversification) & Business strategy ▫ Innovation strategy ▫ International strategy ▫ Strategic Options ▫ Strategy Evaluation & Selection • Strategic Implementation: ▫ Organization Structure & Design ▫ Resource Allocation & Control ▫ Leadership & Managing Strategic Change
- 10. RATE OF PROFIT ABOVE THE COMPETITIVE LEVEL How do we make money? INDUSTRY ATTRACTIVENESS Which businesses should we be in? COMPETITIVE ADVANTAGE How should we compete? CORPORATE STRATEGY BUSINESS STRATEGY Sources of superior profits
- 11. Corporate Level Strategic Decisions are Concerned With: • What business (industry) should we be in? • How can we add value to shareholder investment? • Portfolio Issues • Resource allocation between SBU’s • Structure and control of SBU’s • Corporate financial strategy
- 12. Business Unit Strategy is Concerned with: • Competitive Strategy • Developing market opportunities • Developing new products & services • Resource allocation within the SBU • Structure and control of the SBU
- 13. How is value created? • Consider the organization as a value chain, i.e. a set of interrelated organizational activities and relationships which are necessary to create a product or a service: from research and product development through to marketing and after-sales services. • Some companies are better than others when it comes to executing some (or all) activities of the value chain
- 14. Value Chain Model – M.Porter Inbound Logistics Operations Marketing and Sales After sales Services Outbound Logistics Firm infrastructure Human Resource Management Procurement Technology Development
- 15. Two definitions of strategy • “The determination of the long-run goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals.’’ ▫ - Alfred Chandler • “Strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value” ▫ - Michael Porter
- 16. Your assignment: • For the next session: • Basic facts about your company • Description of the ‘business model’ • Results (financial) • Key strategic issues facing the company • Send the presentation to: ▫ d.russell@psbedu.paris