KNOWLEDGE OBJECTIVES ● Define strategic competitiveness, strategy, competitive advantage, and the strategic management process.
● Describe the competitive landscape
and explain how globalization and technological changes shape it.
● Describe vision and mission and
discuss their value.
● Explain the strategic management
process. The history of strategy … ❖ Ancient concept, long development history but mostly used in army field ▪ Initial: way to get success in wars ▪ Formally noted in Gita (India – 4000 years BC) ▪ Sun Tzu officially mentioned in the “Art of war” ( year 450 BC) ▪ Firstly appeared in English dictionary in 1810 and became a studying subject in late 19th century. ▪ Now: Being widely applied in many different areas such as: management, business .. Strategy: concept
Strategy: A set of related actions that managers take to increase their
company’s performance.
“Strategy is what an organization must make based on their strengths
and weaknesses in context with all the opportunities and threats” (Kenneth Andrew, The concept of corporate strategy)
“Strategy is the process to identify the long-term objectives, select
methods or processes of action and allocate necessary resources to achieve the goals” (Alfred Chandler, Strategy and structure).
“Strategy is to determine the allocation of available resources to
change the competitive balance and move competitive advantage to their side” (Boston Consulting Group –BCG).
“Strategy to cope with competition is the combination of objectives
needed to achieve and means that enterprises need to find to achieve the goals (Michael Porter). Strategic management: the concept Strategic management: “ Strategic management is the process of analyzing the current and future situation of enterprises, planning objectives/ goals, setting out the implementation and monitoring the implementation to achieve the goals/ objectives” Strategic management: the concept Strategic management: “ Strategic management is the process of analyzing the current and future situation of enterprises, planning objectives/ goals, setting out the implementation and monitoring the implementation to achieve the goals/ objectives” Strategic management: the concept Strategy Strategic management – A set of related actions that managers take to increase – Analyze current situation their company’s performance – Develop appropriate strategies
– Put strategies into action
– Evaluate, modify, or change
strategy THE STRATEGIC MANAGEMENT PROCESS
Strategy formulation Strategy
Strategy control 8.8 implementatio MANAGEMENT PROCESS • Step 1: Identifying the Organization’s Current Vision, Mission, Objectives, and Strategies
8.9 Strategies Pyramid
Vision
Mission
Goals
Strategies
Tactics
Action Plan Vision • Strategic vision: The vision of a company lays out some desired future state; it articulates, often in bold terms, what the company would like to achieve
Future of company Where are we going? Vision
Unilever
To grow our business, whilst decoupling our
environmental footprint from our growth and increasing our positive social impact
In Vietnam - The most admired company in Vietnam, committed to make Vietnamese lives better Mission Organizational mission: A company’s mission describes what the company does Mission ✓ statement of the purpose of an organization ✓ important in profit and non-for-profit organizations ✓ important to identify the goals currently in place and the strategies currently being pursued – KODAK: “provide customers with the solutions they need to capture, store, process, output, and communicate images - anywhere, anytime”. Mission Customer – oriented, not product-oriented
2-14 Source: Derek F. Abell, Defining the Business: The Starting Point of Strategic Planning (Englewood Cliffs, N.J.: Prentice-Hall, 1980), p. 17. Microsoft Organisational mission & vision
A mission statement A strategic vision
focuses on current concerns a firm’s future business activities -- “who business path -- “where we are and what we do” we are going” Current product and Markets to be pursued service offerings Future technology- Customer needs being served product-customer focus
Technological and The management style
business capabilities that company is trying to create Long & short-term goal
A goal is a precise and measurable desired future
pursuing the organization’ s mission extend beyond the current fiscal year
Short- range objectives:
–performance targets –less than one year’ s duration MANAGEMENT PROCESS (continued) • Step 2: Analyzing the Environment – successful strategies are aligned with the environment – examine both the specific and general environments to determine what trends and changes are occurring • Step 3. Identifying Opportunities and Threats – opportunities - positive trends in the external environmental – threats - negative trends in the external environment THE STRATEGIC MANAGEMENT PROCESS (continued) • Step 4: Analyzing the Organization’s Resources and Capabilities – examine the inside of the organization – available resources and capabilities always constrain the organization in some way – core competencies - major value-creating skills, capabilities and resources that determine the organization’s competitive weapons
8.2 2 MANAGEMENT PROCESS (continued) • Step 5: Identifying Strengths and Weaknesses – Strengths - activities the organization does well or any unique resource – Weaknesses - activities the organization does not do well or resources it needs but does not possess – organization’s culture has its strengths and weaknesses – SWOT analysis - analysis of the organization’s strengths, weaknesses, opportunities, and threats 8. 2 3 IDENTIFYING THE ORGANIZATION’S OPPORTUNITIES
Organization’s Organization’s Opportunities in
Resources/Abilities Opportunities the Environment MANAGEMENT PROCESS (continued) • Step 6: Formulating Strategies – Require strategies at the corporate, business, and functional levels of the organization – Strategy formulation follows the decision-making process • Step 7: Implementing Strategies – A strategy is only as good as its implementation • Step 8: Evaluating Results – Control process to determine the effectiveness of a strategy
