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    Chapter 1

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    Julie Anne Perido

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    Chapter 1

    Uploaded by

    Julie Anne Perido
    11 views15 pages

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    Chapter-1

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    11 views15 pages

    Chapter 1

    Uploaded by

    Julie Anne Perido

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    You are on page 1of 15

    CHAPTER 1 –

    INTRODUCTION
    TO STRATEGIC
    MANAGEMENT
    LEARNING
    OBJECTIVES:

    • After the completion of the chapter, students


    will be able to:

     define the strategic management in Tourism


    and Hospitality Context;
     discuss the historical origins of
    management;
    strategic
     identify the schools of thoughts on strategic
    management;
     discuss the strategic management framework
    and its objectives; and
     define key terms pertaining to
    strategic
    management and their significance.
    WHAT IS STRATEGIC
    MANAGEMENT?
     Strategic management is a field of study
    that involves the process through which firms
    define their missions, visions, goals, and objectives.
     It helps organizations to prioritize what is important
    for them and provides a holistic view of
    organization.
    an
     Historic origins of strategic management have
    been linked to the military
     The word strategy comes from the
    STRATEGOS, which means “GENERAL.”.In Greek
    terms, it means “LEADER OF THE ARMY.” literal
    HISTORY AND ORIGINS OF STRATEGIC
    MANAGEMENT

    1950’s – 1960’s
    400 BC
    18th CENTURY the focus was on
    The basis of leadership,
    strategic interpersonal
    Carl von
    management can relationships, and the
    Clausewitz’s
    be linked to the systems, processes,
    considered
    works of Sun Tzu. and structures in an
    strategy “a
    Reference to space, organization. Firms
    variation of
    quantities, and used the top-down
    themes” in war approach, with the top
    other factors
    situations. management at the
    related is like the
    According to him, core of the decision-
    characteristics of
    strategy was making process.
    the positioning
    “open-ended and The strategic
    school. According management process
    creative” in a
    to Sun Tzu,
    HISTORY AND ORIGINS OF STRATEGIC
    MANAGEMENT

    1970’s – 1980’s 2000’s –


    1990’s
    firms adopted the globalization led to the PRESENT
    strategic planning emergence of network In the 2000s focus
    approach with an strategies, and strategic on environmental
    emphasis on alliances became the scanning in the
    analysis and focal point around which hospitality
    formalized planning, researchers developed industry context
    the literature. More
    with special teams have made
    efforts from a resource-
    assigned to develop based perspective led to attempts to
    plans. Hospitality & the conceptualization of develop the
    tourism domains on characteristics related to strategy
    strategic planning the firm’s internal implementation
    has begun in this competencies that framework for
    period. enabled them to sustain hospitality and
    competitive advantage.
    10 SCHOOL OF THOUGHTS ON
    STRATEGIC MANAGEMENT

     A framework that can be used to categorize


    the field of Strategic Management.
     It describes each school in context and
    provides a critique. Thus, it acts as a very
    good overview to the entire field of Strategic
    Management.
     Henry Mintzberg, a globally-acclaimed
    academician and author on business and
    management is the proponent of the 10
    SCHOOL OF THOUGHTS ON STRATEGIC
    MANAGEMENT
    10 SCHOOL OF THOUGHTS ON
    STRATEGIC MANAGEMENT

    PLANNING DESIGN LEARNING POWER

    POSITIONING ENTREPRENEURIAL CULTURAL ENVIRONMENTAL

    CONFIGURATION
    COGNITIVE
    THE DESIGN SCHOOL
     The company does an internal analysis with the help of SWOT analysis
     The company then tries to match its internal strength with
    the market strength which is required.

    THE PLANNING
    SCHOOL
     The complete process and the plan
    which the company will implement
    is documented from the start to finish.
     With the plan in hand, the management
    gets a clear direction to move
    in, helping the company to move forward
    unanimously.

    THE POSITIONING SCHOOL


     The management has to determine the competition already
    present in
    the market, and where is their own company positioned
     Once the market has been analyzed, the right strategy is
    THE ENTREPRENEURIAL SCHOOL
     In this case, the CEO needs to be visionary, needs strong leadership skill,
    and must have the right judgement and direction.
     This strategy has been proven right in very few cases over the
    years where the leaders were legendary by themselves.
    THE COGNITIVE SCHOOL
     It is a mental and psychological process to find out
    what is in the minds of the
    consumer and how do we improve on that or use that
    information.
     Once you know customers perception and thought
    process about you, you
    can change the same with strategy. You can either
    improve or you can
    communicate better so that your customers have
    more information about you.

    THE LEARNING SCHOOL


     The company looks at things that worked and tries to implement
    the same
    THE POWER SCHOOL

     Anyone who is known to have power over the company, can


    drive the
    company forward.
     This ensures that there is lesser resistance for the
    strategy to be
    implemented
     It is a very realistic thought process, because in corporates,
    there are
    so many people that power THEshould reside in fewSCHOOL
    ENVIRONMENTAL
    hands.
     Major emphasis is on the environment – which can be a raw
    material or
    a major factor in the strategy of the company.

     Situational analysis is the most used tool in the


    environmental school.
    THE CULTURAL SCHOOL
    The cultural school tries to involve many different departments
    within a company. It is most useful during
    mergers and acquisitions.
     It emphasizes the role of social values, beliefs and
    culture in
    decision making.

    THE CONFIGURATION SCHOOL


     As per the configuration school, strategy
    needs to consider a lot of things
    which can go wrong and cannot be derived
    from simple set of values.
     Over a period, an organization forms various
    sets of values which must be
    transformed so that the organization
    reaches the point that it desires.
     To do this, the organizations stable business might need to be
    disrupted, and the organization must be configured so that it
    reaches the success it was
    STRATEGIC MANAGEMENT
    FRAMEWORK

    A strategic framework is a structured method


    used to define how a project or initiative
    supports the key objectives of stakeholders.
    There are four components to a strategic
    framework:

    Business objective. What will the project


    or initiative achieve?
    Approach. How will that achievement be
    realized?
    Measurement. How will achievement be
    measured and reported?
    Target. What is the forecasted
    improvement that will define success?
    AIMS OF STRATEGIC MANAGEMENT
    1. AT THE CORPORATE LEVEL
    Strategy is about asking questions about what business the firm is in or would like to
    be in, the firm’s potential to create value by being in the business or expanding into a
    new line of business, and the resources and capabilities the firm already has or
    needs to get to sustain/create competitive advantage in its business or businesses.

    2. AT THE BUSINESS LEVEL


    Firms need to ask themselves the following questions: How can we create competitive
    advantage in our product market domains in each strategic business unit (SBU)? How
    can we continue to be an overall cost leader or a broad differentiator, or, for that matter,
    have a cost focus or be a focused differentiator in our market domain?

    3. AT THE FUNCTIONAL LEVEL


    The firm’s objective is to sustain its advantage by focusing on efficiencies related to
    production, operations, administration, marketing, and other support functions. It
    also engages in constant innovation to ensure new product/service development
    rollout, while ensuring that the service and product qualities, as well as the customer
    satisfaction related to them, are at the highest level.

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