Strategic management

Lecture 1.
Concepts and process od strategic
management
 Schedule
1. Sept. 11. Introduction, concepts, process of strategy
2. Sept. 18. Analysis of the environment
3. Sept. 25. Resources and capabilities
4. Oct. 2. Seminar: environment and resource analysis
5. Oct. 9. Competive advantages, and strategic alternatives
6. Oct. 16. Seminar: Strategic options
7. Nov. 6. Stakeholders, and corporate governance
8. Nov. 13. Portfolio-models, diversification
9. Nov. 20 Decision, and strategic goals
10. Nov. 27. Seminar: Stakeholders, and goals
11. Dec. 4. Implementation of the strategy
12. Dec. 11. Organization, culture, and change management
13. Dec. 18 Seminar or exam
 Course textbooks

Essential:
Gerry Johnson, Kevan Scholes,
Richard Whittington.
Exploring Corporate Strategy. 7th
ed, 2005

Or any other books from Johnson, and Scholes

Exlporing Corporate Strategy.
 Assessment

 Written exam (50%)

 Workbook: submitt et the end of

the semester (50%)
 Strategy

The strategy
is about winning !
 The early days …

“Initially strategos refered to a role (a general

in command of an army). Later it came to
mean ‘the art of the general‘, which is to say
the psychological and behavioral skills with
which he occupied the role. By the time of
Pericles (450 BC) it came to mean
managerial skill (administration, leadership
orienta-tion, power). And by Alexander‘s
time (330 BC) it refered to the skill of
employing forces to overcome opposition
and to create a unified system of global
governance“
 The strategy and tactics by Clausewitz

The tactics: using the army to win

the battle.

The strategy: using the battles to

win the war.
 A Definition of Strategy

Strategy is:
• the direction and scope of an organisation,
• over the long term,
• which achieves advantage for the
organisation,
• through configuration of its resources,
• within a changing environment,
• to meet the needs of markets, and
• to fulfill stakeholder expectations.
 The purpose of the strategy?

The strategy are likely to be concerned with scope of an

organization’s activities,
The strategy is to do with the maching of activities of an
organizaton to the environment in which operat
The strategy is also to do with the maching of the
organizaton’s activities to its resource capability,
The strategy have major resource implications for the
organization
The strategy are likely to affect operational decisions,
The strategy will be affected by values and expectations
of those who have power in and around the organizaton,
The strategy likely to affect the long term direction of an
organization
 Different types of managerial problem

Important problems: changing of established rules and processes

Urgent problems: maintaining the established rules and processes

Urgent problems Not urgent problems

Important Crisis management Strategic management
problems (I really must get around to
(I have to do..)
doing)
Not Tactical Operational
important management management
problems
(I always seems to get (I’ll probably ende up just
trapped doing..) doing..)
 The difference between the strategic and
operational types of management
Strategic management Operational management

Ambiguity, Complexity, Simple modells, and

Non-rutine decisions Routinised decisions
Organization-wide Operationally specific

Fundamental, and Small-scale change

significant change
Envirionment or Resource driven
expectation driven
The difference of the strategic and traditional
approache
Strategic approache Traditional approache

Concentrate on the Concentrate on the

environment company

Built on appraisal of the Built on appraisal of the

market and competition past achievement of the
company
Aims to utilize of the Aims to continue of the
competitive advantages past trends
 The Process View: Competitive Strategy 1
as a Sequence of Steps that may overlap

Tasks : Key Questions ...

Competitive & Industry Where do we stand ?

Analysis

Strategy formulation Where do we want to go ?

Implementation and How do we get there ?

Control

BBA_Str1v 13
Basic model of the strategic management process

Strategic
analysis

Strategy
Strategic
implementation
choice
 The strategic analysis

The strategic analysis is concerned with

understanding the strategic position of an
organizaton.

The main factors of the strategic analysis:

organization.
 The environment: provide on one hand threats upon the
firm, and the same environment provide opportunities.
 The resources: provide tools to ansvere the environmantal
challenges, and determine strengths and weaknesses of the
organizations,
 Culture and expectations: determine values and
expectations of those who have power in and around the
organizaton,
 The strategic choice and decision

The strategic choice is concerned with the strategic

options, and a series of strategic decisions.

The main factors of the strategic choice:

 Identifying and generating strategic options,

 Evaluate of the strategic options in the context of

the strategic analysis to assess their relaitive
merits
 Selection of new strategy, selectiong those option
which the organization (and the main
stakeholders) will pursue
 The strategic implementation

The strategic implementation is concerned with the

translation of strategy into action, projects, and
programms.

The main factors of the implementation process:

 Planning and allocating resources, and set up the
controll systems
 Re-form the organizational structure, design a

new culture if it needs.

 Managing strategic change
 Strategy development routes
Strategy
as outcome Imposed
(of cultural and strategy
political processes)

Intended Realised
strategy strategy

Unrealised
strategy
 Patterns of strategy development

Continuity Incremental Flux Transformational

Strategic evolution and consolidation
Strategic decisions eg

Product launch

Acquisition

Divestment

Overseas expansion

Evolving
Strategies evolve and inform strategic
strategic decisions, which in direction
turn consolidate strategic
direction
 The dynamics of paradigm change

The paradigm Development Implementation Corporate

of strategy performance

if
unsatisfactory
Step 1
Tighter control

Step 2
Reconstruct or develop
new strategy

Step 3
Abandon paradigm
and adopt a new one

Source: Adapted from P. Grinyer and J.-C. Spender,Turnaround: Managerial recipes for strategic success,
Associated Business Press, 1979, p. 203
 Industry and Competitive Analysis - Questions 1

Tasks :
What is our business ?
Competitive & Industry
How do we create value ?
Analysis
("Where do we stand?")
What are our organizational and/or
technological capabilities ?

Strategy formulation Who are we in business with ?

("Where do we want
to go ?") How is our business/industry changing ?
What drives this change ?

What are our strengths and weaknesses ?

Implementation and What opportunities open up, and what threats exist ?
Control
("How do we get there?")