Contents
Strategic Management Concepts
Rationale
Strategic Management is a set of managerial decisions and actions aimed at the generation of sustainable competitive advantage.
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Teaching and Learning Resources
The Nature of Strategic Management
A Strategy is a long term plan of action designed to achieve a particular goal most often "winning". Strategy is differentiated from tactics or immediate actions with resources at hand. Originally confined to military matters, the word has become commonly used in many disparate fields, such as:
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- Origins of the word
- Casual and Formal Interpretations of the concept
- Historic Texts On Strategy
- See also
- Notes
- Mission and Objectives
Self-assessment
The Business Mission
Tutorials
Readings
Mission Statement is a summary description of an entity's purpose. It is typically included in the Articles of Incorporation. Many small businesses make the mistake of creating a mission statement that is actually a marketing message; it may look good in the lobby, but it doesn't do much to provide focus for a business.
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See also
External links
Self-assessment |
The External Assessment
Tutorials
Readings
Business Analysis helps an organization to improve how it conducts its functions and activities in order to reduce overall costs, provide more efficient use of resources, and better support customers. It introduces the notion of process orientation, of concentrating on and rethinking end-to-end activities that create value for customers, while removing unnecessary, non-value added work. The person who carries out this task is called a business analyst or BA.
- Business analysis sub-disciplines
- Roles of business analysts
- Business process improvement
- Goal of business analysts
A Business Environment is the social, technological, economic and political environment in which a business functions. The business environment affects organizational decisions, strategies, processes and performance.
Environmental Influences
- Social
environment
- Labor market
- Competition
- Technological environment
- Economic
environment
- Global economy (Macroeconomics)
- Local economy (Microeconomics)
- Political
environment
- Government actions
- Legislation
- Environment
See also
Market Analysis plays a major part in a firm's planning activities. It guides decisions on: inventory, purchase, work force expansion/contraction, facility expansion, purchases of capital equipment, promotional activities, and many other aspects of a company. Forecasts in these areas must be accurate and decision makers must understand how they were derived.
Not all managers are asked to conduct a market analysis, but all managers must make decisions using market analysis data and understand how the data was derived. So all managers need a reasonable understanding of the tools most used for making sales forecasts and analyzing markets.
To understand a market analysis, managers need a basic understanding of statistics and some knowledge of computers.
A large number of market analysis techniques are related to sales forecasting, others are more general techniques for analyzing markets. The literature defines several areas in which market analysis is important. These include: sales forecasting, market research, and marketing strategy. Sales forecasting and market analysis are complementary skills that any marketing manager should possess.
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Self-assessment |
The Internal Assessment
Tutorials
- The Internal Assessment
- The Role of Resources and Capabilities in Strategy Formulation
- Company Analysis
- Financial Analysis
- The Uses of Financial Analysis
Readings
In strategic planning, a Resource-allocation Decision is a plan for using available resources, for example human resources, especially in the near term, to achieve goals for the future. It is the process of allocating resources among the various projects or business units.
The plan has two parts:. Firstly, there is the basic allocation decision and secondly there are contingency mechanisms. The basic allocation decision is the choice of which items to fund in the plan, and what level of funding it should receive, and which to leave unfunded: the resources are allocated to some items, not to others.
There are two contingency mechanisms. There is a priority ranking of items excluded from the plan, showing which items to fund if more resources should become available; and there is a priority ranking of some items included in the plan, showing which items should be sacrificed if total funding must be reduced.
Financial Analysis refers to an assessment of the viability, stability and profitability of a business, sub-business or project.
It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their basis in making business decisions. Based on these reports, management may:
- Continue
or discontinue its main operation or part of its business;
- Make
or purchase certain materials in the manufacture of its product;
- Acquire
or rent/lease certain machineries and equipments in the production
of its goods;
- Issue stocks or negotiate for a bank loan to increase its working
capital.
- other decisions that allow management to make an informed selection on various alternatives in the conduct of its business.
Methods may involve simpler accounting-style lists of benefits and costs on spreadsheets. Larger and riskier decisions with many intangibles may require more rigorous methods like Applied Information Economics.
- Applied Information Economics
- Business valuation
- Fair value
- Fundamental analysis
- Return on capital
- Stock valuation
- Financial planning
- Ratios
- Notes
Self-assessment
Strategies in Action
Tutorials
- Strategies in Action
- Strategic Development
- Life-cycle Approaches to Strategy Formulation
- Portfolio Analysis
- Growth-share Positioning
Readings
Strategic Planning consists of the process of defining objectives and developing strategies to reach those objectives. By labelling a piece of planning "strategic" we expect it to operate on the grand scale and to take in "the big picture" (in contradistinction to "tactical" planning, which by definition has to focus more on the tactics of individual detailed activities). "Long range" planning typically projects current activities and programs into a revised view of the external world, thereby describing results that will most likely occur. "Strategic" planning tries to "create" more desirable future results by (a) influencing the outside world or (b) adapting current programs and actions so as to have more favorable outcomes in the external environment.
External links |
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Competitive Forces and Generic Strategies
Self-assessment
Strategy Analysis and Choice
Tutorials
Readings
SWOT Analysis, is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. The technique is credited to Albert Humphrey, who led a research project at Stanford University in the 1960s and 1970s using data from the Fortune 500 companies.
- Strategic and Creative Use of SWOT Analysis
- Internal and external factors
- Avoiding Errors
- Examples of SWOTs
- Use of SWOT Analysis
- References
- External
links
- Armstrong. M. A handbook of Human Resource Management Practice (10th edition) 2006, Kogan Page , London ISBN 0-7494-4631-5
- Armstrong.M Management Processes and Functions, 1996, London CIPD ISBN 0-85292-438-0
- Armstrong.M Management Processes and Functions, 1996, London CIPD ISBN 0-85292-438-0
Self-assessment
Implementing Strategies: Management Issues
Tutorials
- Implementing Strategies: Management Issues
- Issues in Implementation
- Ethos
- Competition, Legislation and Regulation
- Innovation for Sustainability
- Organisation Structure
- Culture, Management Style and Aspects of Implementation
- The Cultures
Readings
Business Transformation is a key executive management initiative that attempts to align People, Process and Technology initiatives of a company more closely with its business strategy and vision to support and help innovate new business strategies.
Business transformation is achieved through efforts from alignment of People, Process and Technology strategies towards a strategic end-state.
IBM branded Business Transformation through technology and consulting as a core product and service.
Business Transformed was a popular on this subject. The book offered 17 questions that were designed to assist managers to have more relationship and accountability with their staff. Quote: "What if you could master a powerful conversation which would create a new level of relationship in your team, drive breakthrough results and generate real accountability? What if you could master 17 Questions that would transform your business?"
Structure follows strategyThe historian, Alfred Chandler, substantiated his 'Structure follows Strategy' thesis based on four case studies of American conglomerates that dominated their industry from the 1920's onward. Chandler described how the chemical company Du Pont, the automobile manufacturer General Motors, the energy company Standard Oil of New Jersey and the retailer Sears Roebuck managed a growth and diversification strategy by adopting the revolutionary multi-division form. The M-Form is a corporate federation of semi-independent product or geographic groups plus a headquarters that oversees the corporate strategy and coordinates interdependencies.
Although the organisational M-form was implemented differently by each of the organisations, Chandler showed that the need to restructure arose from a strategic shift driven by new technologies and market changes. The M-form emerged and co-evolved with the development of the transportation and communication industries thereby creating the opportunity to manage across time and space.
He described Corporate Strategy as the determination of long-term goals and objectives, the adoption of courses of action and associated allocation of resources required to achieve goals; he defined structure as the design of the organisation through which strategy is administered. Changes in an organisation's strategy led to new administrative problems which, in turn, required a new or refashioned structure for the successful implementation of the new strategy.
Chandler's thesis argued that new organisational forms are no more than a derivative of strategy as he defined it.
References
- "Structure follows Strategy" ProvenModels
- "Business history department" Harvard Business School
Self-assessment
Implementing Strategies: Marketing, Finance/Accounting, R&D, and MIS Issues
Tutorials
Readings
A Market Development strategy targets non-buying customers in currently targeted segments. It also targets new customers in new segments. (Winer)
A marketing manager has to think about the following questions before implementing a market development strategy: Is it profitable? Will it require the introduction of new or modified products? Is the customer and channel well enough researched and understood?
The marketing manager uses these four groups to give more focus to the market segment decision: existing customers, competitor customers, non-buying in current segments, new segments.
Self-assessment
Strategy Review, Evaluation, and Control
Tutorials
Readings
Self-assessment
Recommended Texts
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Strategic
Management: Concepts and Cases,
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Resources
- Strategy - Strategy Implementation and Strategy Execution
- Performance Management
- What is the Balanced Scorecard?
