Chapter 9: Strategic Management

2016/5/13
Why Is Strategic
What Is Strategic Management? Management Important?
Chapter 9: Strategic Management
• Strategic management - what managers do to
develop the organization’s strategies. 1. It results in higher organizational
•Define strategic management and explain why it’s performance.
• Strategies - the plans for how the organization
important
•Explain what managers do during the six steps of the will do what it’s in business to do, how it will 2. It requires that managers examine and adapt
strategic management process compete successfully, and how it will attract to business environment changes.
•Describe the three types of corporate strategies and satisfy its customers in order to achieve 3. It coordinates diverse organizational units,
•Describe competitive advantage and the competitive its goals.
strategies organizations use to get it
helping them focus on organizational goals.
• Business model - how a company is going to
•Discuss current strategic management issues
make money.
Copyright © 2012 Pearson Education, Inc. Copyright © 2012 Pearson Education, Inc. Copyright © 2012 Pearson Education, Inc.
Management, Eleventh Edition, Global Edition by Stephen P. Robbins & Mary Coulter
©2012 Pearson Education Management, Eleventh Edition, Global Edition by Stephen P. Robbins & Mary Coulter
©2012 Pearson Education
Publishing as Prentice Hall 9-1 Publishing as Prentice Hall 9-2 Publishing as Prentice Hall 9-3
What is the Strategic Exhibit 9-1: Strategic

Management Process
Strategic Management Process
Management Process?
• Strategic management process - a six-step • Step 1: Identifying the organization’s current
process that encompasses strategic planning, mission, goals, and strategies
implementation, and evaluation. – Mission: a statement of the purpose of an organization
• The scope of its products and services
– Goals: the foundation for further planning
How can you be a winner in your career? • Measurable performance targets
• Step 2: Doing an external analysis

– The environmental scanning of specific and general
environments
• Focuses on identifying opportunities and threats
Exhibit 9-2: Components of a

Mission Statement
Strategic Management Process SWOT Analysis
• Step 3: Doing an internal analysis • SWOT analysis
– Assessing organizational resources, capabilities, and activities:
• Strengths create value for the customer and strengthen the competitive
position of the firm.
• Weaknesses can place the firm at a competitive disadvantage. • Resources - an organization’s assets that are
used to develop, manufacture, and deliver a
– Analyzing financial and physical assets is fairly easy, but assessing
intangible assets (employee skills, culture, corporate reputation, etc.) product to its customers.
isn’t as simple.
• Capabilities - an organization’s skills and
• Steps 2 and 3 combined are called a SWOT analysis. (Strengths, abilities in doing the work activities needed in
Weaknesses, Opportunities, and Threats)
its business.
Management, Eleventh Edition, Global Edition by Stephen P. Robbins & Mary Coulter Management, Eleventh Edition, Global Edition by Stephen P. Robbins & Mary Coulter Management, Eleventh Edition, Global Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice ©2012
Hall Pearson Education 9-7 Publishing as Prentice ©2012
Hall Pearson Education 9-9
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2016/5/13
Strengths and Weaknesses Strategic Management Process Strategic Management Process

• Step 5: Implementing strategies
• Strengths - any activities the organization • Step 4: Formulating strategies
does well or any unique resources that it has. – Implementation - effectively fitting organizational
– Develop and evaluate strategic alternatives. structure and activities to the environment.
• Weaknesses - activities the organization does – The environment dictates the chosen strategy; effective
– Select appropriate strategies for all levels in the
not execute well or needed resources it does strategy implementation requires an organizational
organization that provide relative advantage over
not possess. competitors.
structure matched to its requirements.
• Core competencies - the organization’s major • Step 6: Evaluating results

– Match organizational strengths to environmental
value-creating capabilities that determine its opportunities. – How effective have strategies been?
competitive weapons. – What adjustments, if any, are necessary?
– Correct weaknesses and guard against threats.
Exhibit 9-3: Types of

Corporate Strategies How Are Corporate Strategies Managed?
Organizational Strategies
• Corporate strategy - an organizational strategy • Strategic Business Unit (SBU) - the single
that determines what businesses a company is independent businesses of an organization
in or wants to be in, and what it wants to do that formulate their own competitive
with those businesses. strategies.
• Types of Corporate Strategies
• Growth: expansion into new products and markets. • BCG matrix - a strategy tool that guides
• Stability: maintenance of the status quo.
resource allocation decisions on the basis of
market share and growth rate of SBUs.
• Renewal: examination of organizational weaknesses
that are leading to performance declines.
Exhibit 9-4: BCG Matrix The Role of Competitive Advantage Five Competitive Forces
• Competitive strategy - an organizational
strategy for how an organization will compete
in its business(es).
• Competitive advantage - what sets an
organization apart; its distinctive edge.
Management, Eleventh Edition, Global Edition by Stephen P. Robbins & Mary Coulter Management, Eleventh Edition, Global Edition by Stephen P. Robbins & Mary Coulter Management, Eleventh Edition, Global Edition by Stephen P. Robbins & Mary Coulter
Publishing as Prentice ©2012
Hall Pearson Education 9-18
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2016/5/13
Types of Competitive Strategies The Need for Strategic Leadership Terms to Know
• Cost Strategy • strategic management • SWOT analysis

• Strategic leadership - the ability to anticipate,
• strategies • corporate strategy
– Seeking to attain the lowest total overall costs relative to envision, maintain flexibility, think • business model • growth strategy
other industry competitors strategically, and work with others in the • strategic management process • stability strategy
• Differentiation Strategy organization to initiate changes that will • mission • renewal strategy
– Attempting to create a unique and distinctive product or create a viable and valuable future for the • opportunities • BCG matrix
service for which customers will pay a premium • threats • competitive strategy
organization. • resources • strategic business units
• Focus Strategy • capabilities • competitive advantage
– Using a cost or differentiation advantage to exploit a • core competencies • functional strategies
particular market segment as opposed to a larger market • strengths • strategic flexibility
• weaknesses • first mover

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2016/5/13

What is the Strategic Exhibit 9-1: Strategic

• Step 2: Doing an external analysis

Exhibit 9-2: Components of a

Strengths and Weaknesses Strategic Management Process Strategic Management Process

• Core competencies - the organization’s major • Step 6: Evaluating results

Exhibit 9-3: Types of

• Cost Strategy • strategic management • SWOT analysis

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