2. Strategic Management
• Title: Introduction to Strategic Management
– Define Strategic Management
– Model of Strategic Management
– Discuss three primary stages of Strategic Management
– Processes of Strategic Management
– Case Study
Slide 1 of 24
Strategic Management
Once there were two company presidents who competed in
the same industry. These two presidents decided to go on a
camping trip to discuss a possible merger. They hiked deep
into the woods. Suddenly, they came upon a grizzly bear
that rose up on its hind legs and snarled. Instantly, the first
president took off his knapsack and got out a pair of
jogging shoes. The second president said, "Hey, you can't
outrun that bear." The first president responded, "Maybe I
can't outrun that bear, but I can outrun you!" This simple
story merely attempts to capture one of the key ideas of
strategic management, which is to achieve and maintain
competitive advantage.
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Organisations
• All these company types use strategic management, it
is more than a competitive advantage tool. It enables
future planning
– Private sector
• Competitive advantage very important
– Public sector
• More concerned with delivery of services within budget
– Not for profit sector
• Concerned with getting budget to deliver services
Slide 3 of 24
Strategy and Strategic
Management Defined
“Strategy” reminder: any actions that alter the strength of an enterprise..
Strategy is the plan that integrates an organisations goals,
policies and actions into a cohesive whole…. Quinn (1980)
– Many more definitions: Robson page 4
Strategic Management is concerned with deciding on
strategy and managing how that strategy is to be put into
effect via strategic analysis, choice and implementation
(Johnson, Scholes 1993)
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Strategic Management Model
Expectations
Objectives,
Culture
Resources
Environment
Strategic
Analysis
Options
Strategic
Choice
Evaluate
Options
Strategy
Select
Strategic
Implement
Resource
Planning
Org
Structure
People &
Systems
Source: Johnson, Scholes
Robson page 10 Slide 5 of 24
Strategic Management
Processes
Question
Phase
Component
•
What should we be doing?
Strategic Analysis
Mission
•
Where are we going?
Strategic Analysis
Goals
•
What routes have we chosen?
Strategic Choice
Strategies
•
•
How do we guide our collective
decisions to get there?
Strategic Implementation
Policies
•
What choices do we have?
Strategic Implementation
Decisions
•
Shall we do it?
Strategic Implementation
Actions
Source: Robson page 17
Slide 6 of 24
More detail
• What is the business doing now?
– What assumptions are we making about
competitors, industry trends etc?
• What is happening in the environment?
– Industry analysis, competitor analysis, Societal
analysis, what are our strengths and weaknesses
• What should the business be doing?
– Strategic alternatives, strategic choices
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Simple Example
Analysis
Mission
Goal
Strategy
Policy
Decision
Action
To be the industry cost leader
Achieve Staff Productivity gain of 5%
Reduce employee time lost
Choice
Improve job satisfaction and working conditions
Various initiatives, upgrade certain job
titles, provide of coffee vending
machines, extra holidays for not missing
days etc…
Implement !!!
Implementation
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Strategic Management
Phases in Context
Strategy Analysis Issues may include deciding what new businesses to
enter, what businesses to abandon, how to allocate resources,
What type of Information Systems to invest in (SISP) Weeks 3,4
Whether to expand operations or diversify, Whether to enter
international markets, Whether to merge or form a joint venture …
Strategic Choice involves being able to evaluate your options and choose
the most appropriate strategy for your company based on the nature of
the organisation and the industry.
Strategy implementation requires a firm to develop an effective
organisational structure, to redirect marketing efforts, to prepare
budgets, to develop and utilise Information Systems.
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Relationship between Strategic
and Operational Plans
STRATEGIC MANAGEMENT PLAN
(mission, goals, policies, structures, funding)
Direction & Priorities
Feedback
OPERATIONAL PLANS
(sales targets, budgetes, resourcing plans etc.)
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Business Environment
• Thriving on Chaos
– Continuous Change
– Education
– Job Design
– Organisation Structure
– Management Style
– Customer Expectations
Slide 11 of 24
Exercises
•
Do a Strategic Analysis on Irish Rail, What business are they in, Who
are their customers, what are their Strengths, Weaknesses,
Opportunities, Threats, Conclusions
•
Do a strategic analysis of Irish soccer for the FAI…What business are
they in, Who are their customers, what are their Strengths,
Weaknesses, Opportunities, Threats, Conclusions
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Recommended Readings
For this weeks material, readings from the introductory chapters of any
text(s) on Strategic Management or Strategic IS Management (i.e.
Robson chapter 1 or Johnson and Scholes or Thomas and
Strickland) and the provided readings of Edward de Bono on lateral
thinking. Specifically, the material that should be focused on is any
material that will help the learner to define, describe and discuss the
following topics in a manner that demonstrates a good
understanding of the material:
Topics
Strategic Management, Strategic Management Phases,
Strategic Management Model, Strategic Thinking, Creativity,
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