Strategic Management

Strategic Management

• The Importance of Strategic Management

• The set of managerial decisions and actions that determines the long-run performance of an organization.

• It results in higher organizational performance.

• It requires that managers examine and adapt to business environment changes.

• It coordinates diverse organizational units, helping them focus on organizational goals.

• It is very much involved in the managerial decision-making process.

• The Strategic Management Process

• Step 1: Identifying the organization’s current mission, objectives, and strategies

• Step 2: Conducting an external analysis (custom, market, techno, product, image)

• Step 3: Conducting an internal analysis (strenght, weakness)

• Step 4: Formulating strategies (alternatives, chose, mactch, correct it)

• Step 5: Implementing strategies

• Step 6: Evaluating Results

• Types of Organizational Strategies

• Tthree growth strategies (Growth - expansion, Stability - maintenance, renewal – new markets)

• Discuss the BCG matrix and how it’s used. Cash cows: low growth rate, high market share Stars: high growth rate, high market share Question marks: high growth rate, low market share Dogs: low growth rate, low market share

• Define SBUs and business-level strategies. A strategy that seeks to determine how an organization should compete in each of its SBUs (strategic business units).

• Competitive advantage in business-level strategies. Differentiates the firm from its competitors Can create a sustainable competitive advantage. Represents the company’s focus on quality management to achieve continuous improvement and meet customers’ demand for quality.

• Explain Porter’s five forces model. Threat of New Entrants, Threat of Substitutes, Bargaining Power of Buyers, Bargaining Power of Suppliers, Current Rivalry.

• Describe three generic competitive strategies. Cost Leadership Strategy, Differentiation Strategy, Focus Strategy