Strategic Management PDF

MODULE 1: Nature of Strategic STAGES OF STRATEGIC Planning MANAGEMENT 1. Formulation Strategy 2. Implementation - A company’s strategy is management’s 3. Eva...

MODULE 1: Nature of Strategic STAGES OF STRATEGIC Planning MANAGEMENT 1. Formulation Strategy 2. Implementation - A company’s strategy is management’s 3. Evaluation game plan for growing the business, staking out a market position, attracting STRATEGIC FORMULATION and pleasing customers, competing - Strategy formulation includes successfully, conducting operations and developing a vision and mission, achieving targeted objectives. identifying an organization’s external - It indicates the manager’s choices opportunities and threats, determining about specific actions it is taking and internal strengths and weaknesses, plans to take to move the company in establishing long-term objectives, the intended direction and achieve generating alternative strategies, and targeted outcomes. It is partly the result choosing particular strategies to pursue. of a trial-and-error organizational learning. STRATEGY IMPLEMENTATION - Strategy implementation requires a Frequently used Strategic Approaches firm to establish annual objectives, devise policies, motivate employees, and 1. Strive to be the industry’s low-cost allocate resources so that formulated provider, thereby aiming for a cost based strategies can be executed. Strategy competitive advantage over rivals implementation includes developing a strategy-supportive culture, creating an 2. Out competing rivals based on such effective organizational structure, differentiating features as higher quality, redirecting marketing efforts, preparing broader product and service selection, budgets, developing and utilizing added performance, betterservice, more information systems, and linking attractive styling, technological employee compensation to superiority or excellent value for money. organizational performance. Strategy implementation is often called the 3. Focusing on a narrow market niche “action stage” of strategic management. and winning a competitive edge by doing a better job than serving buyers’ STRATEGY EVALUATION unique needs and taste constituting the - Strategy evaluation is the final stage in niche. strategic management. Managers to know when particular strategies are not 4. Developing expertise and resource working well; strategy evaluation is the strengths gives the company a primary means for obtaining this competitive capabilities that rival cannot information. All strategies are subject to easily imitate. future modification because external and internal factors are constantly changing. STRATEGIC MANAGEMENT - Can be defined as the art and science Three fundamental strategy-evaluation of formulating, implementing and activities are: evaluating cross functional decisions (1) reviewing external and internal that enable an organization to achieve its factors that are the bases for current objectives. strategies, (2) measuring performance, and (3) taking corrective actions. Strategy 1. Where are we now? evaluation is needed because success 2. Where do we want to go? today is no guarantee of success 3. How are we going to get there? tomorrow! Success always creates new and different problems; complacent * Identifying an organization’s existing organizations experience demise. vision, mission, objectives, and strategies is the logical starting point for INTEGRATING INTUITION AND strategic management because a firm’s ANALYSIS present situation and condition may - The strategic management process can preclude certain strategies and may even be described as an objective, logical, dictate a particular course of action. systematic approach for making major decisions in an organization. It attempts - The strategic-management process is to organize qualitative and quantitative dynamic and continuous. A change in information a way that allows effective any one of the major components in the decisions to be made under conditions of model can necessitate a change in any or uncertainty. all of the other components. For instance, - Most organizations can benefit from a shift in the economy could represent a strategic management, which is based major opportunity and require a change upon integrating intuition and analysis in in long-term objectives and strategies; a decision making. Choosing an intuitive failure to accomplish annual objectives or analytic approach to decision making could require a change in policy; or a is not an either–or proposition. major competitor’s change in strategy Managers at all levels in an organization could require a change in the firm’s inject their intuition and judgment into mission. Good communication and strategic-management analyses. feedback are needed throughout the Analytical thinking and intuitive strategic-management process.. thinking complement each other. Successful Business Strategies ADAPTING CHANGE - The strategic-management process is TOYOTA based on the belief that organizations - Cars are big, heavy, and expensive to should continually monitor internal and ship around in large numbers. That's one external events and trends so that timely of the reasons the US market was caught changes can be made as needed. off guard when Toyota started selling - In today’s business environment, more Japanese-made cars in the US at lower than in any preceding era, the only prices than they could match during the constant is change. Successful 1970s. organizations effectively manage change, - Toyota spent years studying the continuously adapting their production lines of American carmakers bureaucracies, strategies, systems, such as Ford. products, and cultures to survive the - They knew that the US car industry shocks and prosper from the forces that was more advanced and efficient than decimate the competition. the Japanese industry. So they decided to be patient. THE STRATEGIC MANAGEMENT - They studied their competitors and MODEL tried to copy what the Americans did so well. They blended these processes with These are three important questions to their strengths and came up with answer in developing a strategic plan: something even better. - Toyota’s success is based on They identified the most likely continuously improving its functional problem - the low quality of listings that level strategy, which focuses on day-to- were simply not enticing. day operations, decisions, and goals. The co-founders grabbed their cameras They understood that the bigger picture and visited every one of their NYC consists of thousands of small tasks and listings. They persuaded the owners to employees. let them take a ton of photographs of their places APPLE They touched them up a bit and - First-mover advantage is often not an uploaded them to the website, replacing advantage. A well-executed 'follower' the old, usually bad photos. Within a strategy will outperform a less well month of starting this strategy, sales executed 'first mover' strategy every doubled. Then tripled. The rest is history. single time. One of the most common - Airbnb's story shows that business misconceptions in the startup world is strategies don’t have to be grand and that it's the 'idea' that matters the most. super long-term affairs. They can The truth is, the world's most successful revolve around a specific challenge companies were rarely the original preventing the business from taking innovators. Why? off. Once the challenge is solved, the Your market isn't well defined and company progresses on its roadmap and doesn't even know your product type integrates the solution into the revamped exists. business strategy. If you have a market, it's probably just the early adopters - by definition, that's a MODULE 2: THE BUSINESS niche market. VISION AND MISSION Technology will often hold you back rather than power you to success. The Corporate Every business that comes after you Vision will have the advantage of learning from your mistakes. - Vision Statement should answer the - Apple could easily have created a bsic question, “What do we want to phone much earlier than it did and sold become?” it to the market before any other - kung ano ang gusto nyong maging companies, But it didn't. Instead, it waited until the technology was mature  The vision statement should be enough to sell it. short, preferably one sentence, and as many managers as possible AIRBNB should have input into developing - Airbnb is one of the fastest-growing the statement. tech companies. Shortly after their IPO  A business vision should align with in December 2020, they reached a your business goals and aspirations US$100B+ valuation, and the company and capture the key elements of has quite possibly changed the way we what business success looks like to travel. you. A business vision statement They had plenty of listings on the site should be a part of your strategic and plenty of site traffic. Potential plan and viewed as living document customers were out there, but they that will be revisited and revised. It weren’t making enough bookings. should speak directly to your employees and guide you while you are planning to start a business,  providing a sense of purpose and * kailangan alam ng mga employees ang direction for your staff. The vision ng company business vision of an organiztaion might change over time, as 5. Develop a clear and concise companies adapt to their business statement - Use the keywords and ideas environment and external factorss from step 2 to create a vision statement that might affect their ability to that is memorable, engaging, change their mission. informative, and inspiring. Process of Developing a Vision 6. Revise and refine your vision Statement statement - Treat your vision statement as a living document that will be 1. Identify important stakeholders - revisited and revised. It should evolve as Determine who will be involved in your business grows and changes. crafting the vision statement. In small business, you may be able to ask 7. Share your vision statement with everyone for their insight, while in a key stakeholders - Once you have larger operation, you may need to be finalized your vision statement, more selective while still capturing a communicate it to your employees, range of employee voices. investors, and potential employees. * your stakeholders will be your 8. * put it in your website para marami passengers, clients if you are working in makakita airline. On how you protect your employees can list in your vision. Vision Statement Examples Vision Statement: To be a world class 2. Start with a list of keywords - Map international hotel and hospitality out your business’s most audacious company, committed to being the goals and review your long term goals industry leader in all our activities to help you identify the key themes through dedication to our customers and and ideas that should be included in colleagues. your vision statement. * mag lagay ng keywords kung ano Mission yung gusto nilang marinig - Mission Statement  A declaration of an organization’s 3. Align it with your business values “reason for being.” and goals - Ensure that your vision  Answers the pivotal question “What statement reflects your company's values is our business?” and long-term objectives. It should  Also called a creed statement, a describe how your company seeks to statement of purpose, a statement of impact and improve the world around it. philosophy, a statement of beliefs, and a statement of business 4. Create a plan to communicate your principles vision statement to your employees -  A business mission statement is a Your vision statement should be an concise statement that defines what internal communications tool that helps a company does, its purpose, and align and inspire your team to reach the how it serves its customers. It company's goals. Prepare to commit outlines the company's culture, time and resources to the vision you values, ethics, fundamental goals, establish. and agenda, and how each of these applies to the company's  stakeholders, including employees, 4. List the Company's Top Values: distributors, suppliers, shareholders, Offer the main goal accomplished when and the community at large. A the company successfully fulfills its mission statement is essential for mission. three key reasons: to communicate to employees what the purpose of 5. Keep it Short and Concise: Sum up their work is, to unite the leadership the company's mission in just a few team in a single direction for the sentences. company, and to attract job seekers to the business. 6. Evaluate Performance: Use the mission statement to evaluate the A mission statement should: company's performance and provide  define what the organization is and guidance to employees. what the organization aspires to be  be limited enough to exclude some 7. Ensure All Stakeholders Work ventures and broad enough to allow Toward the Same Goals: The mission for creative growth statement should give employees a sense  distinguish a given organization of identity and ensure all stakeholders from all others work toward the same goals.  serve as a framework for evaluating both current and prospective 8. Review and Update: Review the activities mission statement during strategic  be stated in terms sufficiently clear planning sessions and update it every to be widely understood throughout few years or as needed. the organization  A good mission statement reflects Sample Mission Statement the anticipations of customers.  The operating philosophy of Starbucks Mission organizations should be to identify With every cup, with every conversation, customers’ needs and then provide a with every community - we nurture the product or service to fulfill those limitless possibilities of human needs. connection. Process of Developing a Mission Difference between a Vision and Statement Mission Statement - Sometimes companies combine their 1. Gather Information: Form a vision and mission into one statement. planning team and organize a meeting to When a company does this, it is define whom the organization serves and important to ensure they have defined clarify what the organization does. both what they do and what they want to accomplish. A company’s vision and 2. Define the Company's Purpose: mission statements can change as the State what the company does and how it company grows and achieves its original accomplishes its goals. goals. Coffee company. 3. Clarify the Target Audience: Vision: To be the world’s best coffee Identify the organization's clientele and company while maintaining true to our core activities. core values. Mission: To provide people with the Mission supplement the vision energy they need to achieve their goals Mission - present one cup of coffee at a time. Vision - future Combined vision and mission statement: To provide people with the energy they need to achieve their goals one cup of coffee at a time while also becoming the world’s best coffee company. - The primary difference between a vision statement and a mission statement is the time the statement focuses on. A mission statement focuses on the present and a vision statement focuses on the future. - A company’s mission statement plays a vital role in the company achieving the goals outlined within its vision statement. When the two statements are written correctly, a vision statement should answer where the company wants to go and the mission statement should answer what the company will do daily to get there. The Importance of Strategic Vision and Mission Statement in the Company 1. To ensure unanimity of purpose within the organization 2. To provide a basis, or standard, for allocating organizational resources. 3. To establish a general tone or organizational climate 4. To serve as a focal point for individuals to identify with the organization’s purpose and direction 5. To facilitate the translation of objectives into a work structure 6. To specify organizational purposes