Teacher Development Course on Successful Strategic Management

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Teacher Development Course on Successful
Strategic Management

• Dr. Theresa Lau
• Associate Professor
• Hong Kong Polytechnic University
• Dr. K.F. Chan
• Associate Professor
• Hong Kong Polytechnic University
• November 2004

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Strategic Management

• Strategic Management
• The set of managerial decisions and actions that
  determines the long-run performance of a
  corporation

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What is Strategy

• Strategy is a pattern in a stream of decisions or
  actions H. Mintzberg
• It is a plan intended course of action
• It is a pattern a stream of actions
• It is a position a product/market domain
  related to environment
• It is a perspective a concept a shared
  ideology driving force the heart beat
• It is a ploy a specific manoeuvre to outbeat a
  competitor

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Deliberate and Emergent Strategies
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Three Key Strategic Questions

• Where is the organization now?
• If no changes are made, where will the
  organization be in one, two, five or ten years?
  Are the answers acceptable?
• If the answers are not acceptable, what specific
  actions should management undertake? What are the
  risks and payoffs involved?

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Benefits of Strategic Management

• Clearer sense of strategic vision
• Sharper focus on what is strategically important
• Better coordination, communication and staff
  commitment
• Businesses with strategic management are more
  effective
• Positive relationship between strategy and
  financial performance

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Basic Elements of the Strategic Management Process
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Developing a Strategic Vision

• Involves thinking strategically about
• Firms future business plans
• Where to go
• Tasks include
• Providing long-term direction
• Giving firm a strong identity

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Missions vs. Strategic Visions

• A mission statement focuses on current business
  activities -- who we are and what we do
• Current product and service offerings
• Customer needs being served
• Technological and business capabilities

• A strategic vision concerns a firms future
  business path -- where we are going
• Markets to be pursued
• Future technology-product-customer focus
• Kind of company that management is trying to
  create

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Environmental Scanning

• Defined
• The monitoring, evaluating, and disseminating of
  information from the external and internal
  environments to key people within the firm.

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Environmental Scanning

• Identify strategic factors
• SWOT Analysis
• Strengths, Weaknesses
• Opportunities, Threats
• Internal Environment
• Strengths Weaknesses
• Within the organization but not subject to
  short-run control of management
• External Environment
• Opportunities Threats
• External to the organization but not subject to
  short-run control of management

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Environment Scanning Industry Analysis

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The Value Chain
General administration
Human resource management
Technology development
Procurement
Inbound logistics
Outbound logistics
Marketing and sales
Operations
Service
Adapted from Exhibit 3.1 The Value Chain Primary
and Support Activities Source Adapted with
permission of The Free Press, a division of Simon
Schuster, Inc., from Competitive Advantage
Creating and Sustaining Superior Performance by
Michael E. Porter.
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Strategy Formulation

• Defined
• Development of long-range plans for the
  effective management of environmental
  opportunities and threats in light of corporate
  strengths and weaknesses.

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Hierarchy of Strategy
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Corporate Strategy I

• Corporations overall direction and the
  management of its business
• Key Issues
• Firms directional strategy
• Firms portfolio strategy

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Corporate Strategy II Directional Strategy

• Growth Strategy
• Concentration growth
• Vertical integration
• Diversification
• Stability Strategy
• Retrenchment Strategy

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Corporate Strategy III

• Portfolio Analysis
• BCG (Boston Consulting Group) Matrix
• Product life cycle and funding decisions
• Question marks
• Stars
• Cash cows
• Dogs

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BCG Matrix
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Business Strategy

• Emphasizes improving the competitive position of
  a corporations products or units

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Porters Competitive Strategies

• Generic Competitive Strategies
• - Lower cost strategy
• . Design, produce, market more
• efficiently than competitors
• - Differentiation strategy
• . Unique and superior value in terms of
• product quality, features, service
• - Niche strategy

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Functional Strategy

• Functional Strategy
• - The approach a functional area takes to achieve
  corporate and business unit objectives and
  strategies by maximizing resource productivity.

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Functional Strategy

• Core competency
• Something that a corporation can do exceedingly
  well a key strength
• Distinctive competencies
• When core competencies or core capabilities are
  superior to those of the competition.

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Definition of Strategy Implementation

• Strategy Implementation
• The process of putting strategies and policies
  into action

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Strategy Implementation

• Implementation Process Questions
• Who are the people to carry out the strategic
  plan?
• What must be done to align operations with new
  direction?
• How is work going to be coordinated?

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Definition of Evaluation and Control

• Evaluation and Control
• The process of monitoring corporate activities
  and performance results so that actual
  performance can be compared with desired
  performance