Week 1 Strategic Management Essentials: 0312F-Manajemen Strategi Dan Kinerja Bisnis

0312F-Manajemen Strategi dan Kinerja Bisnis
Week 1
Strategic Management Essentials
 SUB TOPICS
WHAT IS STRATEGIC MANAGEMENT ?

KEY TERMS IN STRATEGIC
MANAGEMENT
THE STRATEGIC MANAGEMENT MODEL
BENEFIT OF STRATEGIC MANAGEMENT
GUIDELINES FOR EFFECTIVE STRATEGIC
MANAGEMENT
COMPARING BUSINESS AND MILITARY
STRATEGY
Chapter Objectives
 Discuss the nature and role of a chief strategy officer (CSO).

 Describe the strategic-management process.
 Explain the need for integrating analysis and
 intuition in strategic management.
 Define and give examples of key terms in strategic
management.
 Discuss the nature of strategy formulation,
 implementation, and evaluation activities.
 Describe the benefits of good strategic management.
 Discuss the relevance of Sun Tzu’s The Art of War
 to strategic management.
 Discuss how a firm may achieve sustained
 competitive advantage.
1-3
Defining
• Strategic management
– the art and science of formulating,
implementing, and evaluating cross-
functional decisions that enable an
organization to achieve its objectives
1-4
Defining
• A strategic plan is a
• Strategic management is company’s game
used synonymously with the plan.
term strategic planning. • A strategic plan
• Sometimes the term strategic results from tough
management is used to refer managerial choices
to strategy formulation, among numerous
good alternatives,
implementation, and and it signals
evaluation, with strategic commitment to
planning referring only to specific markets,
strategy formulation. policies, procedures,
and operations.
1-5
Stages of
Strategic Management
Strategy Strategy Strategy

formulation implementation evaluation
1-6
Stages of
• Strategy formulation
– includes developing a vision and mission,
identifying an organization’s external
opportunities and threats, determining internal
strengths and weaknesses, establishing long-
term objectives, generating alternative
strategies, and choosing particular strategies to
pursue.
1-7
Strategy Formulation
• Deciding what new businesses to enter

• What businesses to abandon
• How to allocate resources
• Whether to expand operations or diversify
• Whether to enter international markets
• Whether to merge or form a joint venture
• How to avoid a hostile takeover
1-8
Stages of
• Strategy implementation
– requires a firm to establish annual
objectives, devise policies, motivate
employees, and allocate resources so that
formulated strategies can be executed
– often called the action stage
1-9
Some Opportunities
and Threats
• Computer hacker problems are

increasing.
• Intense price competition is plaguing
most firms.
• Unemployment and underemployment
rates remain high.
• Interest rates are rising.
• Product life cycles are becoming shorter.
• State and local governments are
financially weak.
1-10
Key Terms in
• Internal strengths and internal

weaknesses
– an organization’s controllable
activities that are performed
especially well or poorly
– determined relative to competitors
1-11
Key Terms in
• Objectives
– specific results that an organization seeks to
achieve in pursuing its basic mission
– long-term means more than one year
– should be challenging, measurable, consistent,
reasonable, and clear
1-12
Key Terms in
• Strategies
– the means by which long-term objectives will be
achieved
– may include geographic expansion, diversification,
acquisition, product development, market
penetration, retrenchment, divestiture, liquidation,
and joint ventures
1-13
Key Terms in
• Annual objectives
– short-term milestones that organizations must
achieve to reach long-term objectives
– should be measurable, quantitative, challenging,
realistic, consistent, and prioritized
– should be established at the corporate, divisional,
and functional levels in a large organization
1-14
Sample
Strategies in Action in 2013
TABLE 1-1: Strategies in Action in Sample 2013

▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
Walgreen Company___________________________________________________________
Walgreen’s is deepening its penetration into the southeastern portion of the USA by acquiring
firms such as USA Drug, May’s Drug, Med-X, Drug Warehouse, and Super D Drug. Walgreen’s is
expanding globally through acquisition of firms such the U.K.’s Alliance Boots GmbH. Walgreen’s
is acquiring firms because sales have dropped 15 percent in the last year, as a result of selling
more generic drugs, and their same-store-overall sales have dropped 10 percent, because of
the chain’s exit from Express Scripts Holding.
Netflix, Inc._________________________________________________________________
The long-time DVD-by-mail provider is struggling to survive as it switches from the DVD
business to (a) providing Internet-delivered content and (b) expanding overseas. Major rivals
include News Corp.’s Hulu and Coinstar’s Redbox. Netflix’s overseas efforts are not going well
because that strategy requires country-by-country deals to line up video content. Netflix lost
850,000 DVD subscribers and added 530,000 movie and TV-show streaming customers. Netflix’s
international streaming business lost about $400 million in 2012.
1-15
Key Terms in
• Policies
– the means by which annual objectives will be
achieved
– include guidelines, rules, and procedures
established to support efforts to achieve stated
objectives
– guides to decision making and address repetitive or
recurring situations
1-16
The Strategic-Management Model
Where are we now?
Where do we want to go?
How are we going to get there?

1-17
A Comprehensive
Strategic-Management Model
1-18
Benefits of
• Historically, the principal benefit of strategic

management has been to help organizations
formulate better strategies through the use of a
more systematic, logical, and rational approach to
strategic choice
• Communication is a key to successful strategic
management
• Through dialogue and participation, managers and
employees become committed to supporting the
organization
1-19
Benefits to a Firm
That Does Strategic Planning
1-20
Financial Benefits
• Businesses using strategic-management concepts

show significant improvement in sales, profitability, and
productivity compared to firms without systematic
planning activities
• High-performing firms seem to make more informed
decisions with good anticipation of both short- and
long-term consequences
1-21
Nonfinancial Benefits
 Enhanced awareness of external threats,

 Improved understanding of competitors’ strategies,
 Increased employee productivity,
 Reduced resistance to change,
 Clearer understanding of performance–reward relationships.
 Increased discipline
 Improved coordination
 Enhanced communication
 Increased forward thinking
 Improved decision-making
 Increased synergy
 Effective allocation of time and resources
1-22
Why Some Firms Do No
Strategic Planning
• Lack of knowledge in strategic planning

• Poor reward structures
• Firefighting
• Waste of time
• Too expensive
1-23
Why Some Firms Do No
Strategic Planning
• Laziness
• Content with success
• Overconfidence
• Prior bad experience
• Honest difference of opinion
1-24
Pitfalls in Strategic Planning
• Using strategic planning to gain control over decisions

and resources
• Doing strategic planning only to satisfy accreditation or
regulatory requirements
• Too hastily moving from mission development to
strategy formulation
• Failing to communicate the plan to employees, who
continue working in the dark
• Top managers making many intuitive decisions that
conflict with the formal plan
1-25
Pitfalls in Strategic Planning
• Top managers not actively supporting the strategic-

planning process
• Failing to use plans as a standard for measuring
performance
• Delegating planning to a “planner” rather than involving
all managers
• Failing to involve key employees in all phases of
planning
• Failing to create a collaborative climate supportive of
change
1-26
Guidelines for Effective
1-27
Comparing Business
and
Military Strategy
• A fundamental difference between military and

business strategy is that business strategy is
formulated, implemented, and evaluated with an
assumption of competition, whereas military strategy is
based on an assumption of conflict
• Both business and military organizations must adapt to
change and constantly improve to be successful
1-28
Excerpts from Sun Tzu’s
The Art of War Writings
• War is a matter of vital importance to the state: a

matter of life or death, the road either to survival or
ruin. Hence, it is imperative that it be studied
thoroughly
• Know your enemy and know yourself, and in a hundred
battles you will never be defeated
• Skillful leaders do not let a strategy inhibit creative
counter-movement
1-29
Thank You

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0312F-Manajemen Strategi dan Kinerja Bisnis

WHAT IS STRATEGIC MANAGEMENT ?

 Discuss the nature and role of a chief strategy officer (CSO).

Strategy Strategy Strategy

• Deciding what new businesses to enter

• Computer hacker problems are

• Internal strengths and internal

TABLE 1-1: Strategies in Action in Sample 2013

Where are we now?

Where do we want to go?

How are we going to get there?

• Historically, the principal benefit of strategic

• Businesses using strategic-management concepts

 Enhanced awareness of external threats,

• Lack of knowledge in strategic planning

• Using strategic planning to gain control over decisions

• Top managers not actively supporting the strategic-

• A fundamental difference between military and

• War is a matter of vital importance to the state: a

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