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Strategy 1

The document discusses strategic management and entrepreneurship. It covers topics like competitive advantage, core competencies, the strategic management process, developing a vision and mission statement, and conducting a SWOT analysis.

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19 views27 pages

Strategy 1

The document discusses strategic management and entrepreneurship. It covers topics like competitive advantage, core competencies, the strategic management process, developing a vision and mission statement, and conducting a SWOT analysis.

Uploaded by

FYP NAI HOTA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ENTREPRENEURSHIP

Lecture No: 11
Resource Person:
Malik Jawad Saboor
Assistant Professor
Department of Management Sciences
COMSATS Institute of Information Technology
Islamabad.
Previous Lecture Review

• Entrepreneurs in Action

• VIDEO ON STEVE JOBS – APPLE INC.


Objectives
• Strategic Management

• Competitive Advantage

• Core Competency

• Strategic Management Process

• Vision & Mission Statement

• SWOT Analysis
A Major Shift . . .
. . . From financial capital to intellectual
capital.
– Human
– Structural
– Customer
Strategic Management
• Is crucial to building a successful business.
• Involves developing a game plan to guide a
company as it strives to accomplish its mission,
goals , and objectives, and to keep it on its desired
course.
Strategic Management and Competitive
Advantage
• Developing a strategic plan is
crucial to creating a sustainable
competitive advantage, the
aggregation of factors that sets a
company apart from its competitors
and gives it a unique position in the
market that is superior to its
competition.
• Example: Blockbuster Video
Key: Core Competencies
• Unique set of capabilities a company develops in key
areas, such as superior quality, customer service,
innovation, team-building, flexibility, responsiveness,
and others that allow it to vault past competitors.
– They are what a company does best.
– Best to rely on a natural advantage (often linked to a
company’s “smallness”).
• Example: Netflix
Key: Core Competencies
Power of Core Competence
• Is the Competence hard to copy?

• Is the Competence Durable?

• Is the Competence really Competitively Superior?

• Can the Competence be trumped by Rivals?


Building a Sustainable Competitive Advantage

Capabilities

Sustainable Superior value


Lessons Core competitive
learned competencies for customers
advantage

Skills
Strategic Management Process

Step 1. Develop a vision and translate it


into a mission statement.
Step 2. Assess strengths and weaknesses.
Step 3. Scan environment for opportunities
and threats.
Step 4. Identify key success factors.
Strategic Management Process
(continued)

Step 5. Analyze competition.


Step 6. Create goals and objectives.
Step 7. Formulate strategies.
Step 8. Translate plans into actions.
Step 9. Establish accurate controls.
Step 1: Develop a Vision and
Create a Mission Statement
• Vision – the result of an entrepreneur’s dream
of something that does not exist yet and the
ability to paint a compelling picture of that
dream for everyone to see.
• A clearly defined vision:
– Provides direction
– Determines decisions
– Motivates people
Step 1: Develop a Vision and
Create a Mission Statement
• Addresses question: “What business are we
in?”
• The mission is a written expression of how the
company will reflect an entrepreneur’s values,
beliefs, and vision – more than just “making
money.”
• Serves as a “strategic compass.”
Step 1: Develop a Vision and
Create a Mission Statement

• Survey of employees: 89 percent of


employees say their companies have a
mission statement
but…
• Only 23 percent of workers believe their
company’s mission statement has
become a way of doing business!
Step 2: Assess Company Strengths
and Weaknesses

• Strengths
– Positive internal factors a company can
draw on to accomplish its mission, goals,
and objectives.
• Weaknesses
– Negative internal factors that inhibit a
company’s ability to accomplish its
mission, goals, and objectives.
Step 2: Assess Company Strengths
and Weaknesses
What to look for in Identifying Company’s Strengths
• Core competencies in ______.

• A strong financial condition; ample financial resources


to grow the business.

• Strong brand name image/company reputation.

• Economy of scale and/or learning and experience


curve advantages over rivals.
Step 2: Assess Company Strengths
and Weaknesses
What to look for in Identifying Company’s Strengths
• Proprietary technology/superior technological skills/important patents.

• Cost advantages over rivals.

• Product innovation capabilities.

• Proven capabilities in improving production processes.

• Good supply chain management capabilities.

• Good customer service capabilities.


Step 2: Assess Company Strengths
and Weaknesses
What to look for in Identifying Company’s Strengths
• Better product quality relative to rivals.

• Wide geographic coverage and distribution capability.

• Alliances/joint ventures with other firms that provide


access to valuable Technology, competencies, and/or
attractive geographic markets.
Step 2: Assess Company Strengths
and Weaknesses
What to look for in Identifying Company’s Weaknesses
• No clear strategic direction.

• No well-developed or proven core competencies.

• A weak balance sheet; burdened with too much debt.

• Higher overall unit costs relative to key competitors.

• A product/service with features and attributes that are


inferior to those of rivals.
Step 3: Scan for Opportunities
and Threats
What to look for in Identifying Company’s Weakness
• Behind on product quality, R&D, and/or technological
know-how.

• Lack of management depth.

• Short on financial resources to grow the business and


pursue promising initiatives.
Step 3: Scan for Opportunities
and Threats
• Opportunities
– Positive external factors the company can exploit
to accomplish its mission, goals, and objectives.
• Threats
– Negative external factors that inhibit the firm's
ability to accomplish its mission, goals, and
objectives.
Step 3: Scan for Opportunities
and Threats
What to look for in Identifying Company’s
Opportunities
• Utilizing existing company skills or technological know-
how to enter new product lines or new businesses.

• Falling trade barriers in attractive foreign markets.

• Acquiring rival firms or companies with attractive


technological expertise or capabilities.
Step 3: Scan for Opportunities
and Threats
What to look for in Identifying Company’s
Opportunities
• Serving additional customer groups or market
segments.

• Expanding into new geographic markets.

• Expanding the company’s product line


to meet a broader range of customer
needs.
Step 3: Scan for Opportunities
and Threats
What to look for in Identifying Company’s Threats
• Increasing intensity of competition among industry

• Slowdowns in market growth.

• Likely entry of potent new competitors.

• Growing bargaining power of customers or suppliers.

• A shift in buyer needs and tastes away from the


industry’s product.
Step 3: Scan for Opportunities
and Threats
What to look for in Identifying Company’s Threats

• Adverse demographic changes that threaten to curtail


demand for the industry’s product.

• Vulnerability to unfavorable industry driving forces.

• Restrictive trade policies on the part of foreign


governments.

• Costly new regulatory requirements.


Lecture Review

• Strategic Management

• Competitive Advantage

• Core Competency

• Strategic Management Process

• Vision & Mission Statement

• SWOT Analysis
Reference: Essentials of Entrepreneurship & Small Business Management,
Zimmer, Scarborough &Wilson, 5th Edition
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