Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Strategic Business

Management

1-2

What is the meaning of Strategic Business Management?

The activities associated with running a company, such as controlling, leading, monitoring, organizing, and planning

1-3

Planning LeadingOrganizing Controlling

Management Functions

Management Functions

1-4

A process that includes defining goals,

establishing strategy & developing plans to coordinate activities

Planning

Planning

1-5

Determining what tasks are to be done, who is to do

them, how the tasks are to be grouped, who reports to whom & where decisions

are to be made

Organizing

Organizing

1-6

A function that includes motivating employees,

directing others, selecting the most effective communication

channels, and resolving conflicts

Leading

Leading

1-7

Monitoring activities to ensure they are being

accomplished as planned & correcting any significant

deviations

Controlling

Controlling

1-8

Efficient versus Effective Management

Traditional ManagementDecision making, planning, & controlling

CommunicationExchanging routine information & processing

paperwork

Human Recourses ManagementMotivating, disciplining, managing conflict, Staffing, &

training

NetworkingSocializing, politicking, & interacting with others

1-9

FutureShort /

Long Term planning

Strategy

1-1010

Strategy & Objectives

S

M

A

R

T

Specific

Measurable

Achievable

Realistic

Time bounded

1-11

Strategic Challenges

1-12

Business Mission and Its Vision

An aspirational description of what an organization would like to achieve or accomplish in the mid-term

or long-term future

A written declaration of an organization's core purpose and focus that normally remains unchanged

over time.

Vision

Mission

A mission is different from a vision in that the former is the cause and the latter is the effect; a mission is something to be accomplished

whereas a vision is something to be pursued for that accomplishment

1-13

A SWOT Chart

SWOT AnalysisThe use of a SWOT chart to compile and organize the

process of identifying company

Strengths,Weaknesses,

Opportunities, and Threats.

P.S lately they call it SLOT as L stands for Limitations

1-14

Organization’s Strategy

1-15

Types of Strategic Planning

1-16

Types of Strategic Planning

Diversification strategy

The firm will expand by adding new product lines.

Vertical integration strategy

means the firm expands by producing its own raw materials, or selling its product direct.

Consolidation strategy

reduces the company’s size.

Geographic expansion strategy

takes the company abroad.

1-17

Cost leadership:

A firm aims to become the low-cost leader .

Differentiation:

A firm seeks to be unique in its industry.

Focus:

A firm seeks to compete by providing a product or service customers can get in no other way.

Functional strategiesIdentify the basic courses of action that each department will

pursue in order to help the business attain its competitive goals.

Types of Strategic Planning

1-18

Competitive Advantage

Any factors that allow an organization to differentiate its product or service from

those of its competitors to increase market share

Competitive advantage

Ex. Mc Donald’s competitive advantage, consist of two key

elements: Production & delivery speed; while Microsoft’s competitive

advantage is making user friendly software

1-19

1

2

3

4

5

Strategic Business Management

Business target market

Business mission statement

Business customer

Business strategy for competitionBusiness objectives and performance

6 Policies & procedures

9

7

8

Potential opportunities for increased sales & profits

Foresee future

Assessment of your competitors

1-20

1. Business mission statement without a guiding mission statement, a business is bound to fail.

2. Business target market

a business should have a written description of the firm’s target market , knowing where the product or service is produced?

2. Business customer

you should answer the following questions: - what customers characteristics are? - what are they purchasing? - what they buy from you?

Strategic Business Management

1-21

4. Business strategy for competition Do you have a master strategy designed to keep your firm

ahead of the competition? Every firm should define its competitive advantage & then

seek to maintain it through planning.

5. Business objectives and performance Do you have written objectives to guide your company’s

performance in critical areas? Are they specific and measurable? Do they include a time frame and an index for measuring

progress?

6. policies & procedures Have you created written policies to guide action and decision

making in the organization and to ensure consistency? Do employees know what these policies are? Are thy followed?

Strategic Business Management

1-22

7. Potential opportunities for increased sales Have you identified potential opportunities for increased

sales and profits for your firm?

New products, new markets, or new locations could generate more business for the small firm if management has the capacity to reach them ?

8. Foresee future Do you attempt to foresee future conditions and changes

that have a significant impact on your business?

Do you predict future economic trends and their affection your business?

Although no forecast is ever completely accurate, managers should attempt to peer into the future to avoid being surprised by unforeseen changes.

Strategic Business Management

1-23

9. Assessment of your competitors

Do you make assessment of your competitors’ actions so that you can plot a strategy to meet them?

How do customers perceive your firm in comparison to your competitors?

Strategic Business Management

1-24

Strategic Management Process

Strategic management tasks Step 1: Define the Business and Its Mission

Step 2: Perform External and Internal Audits

Step 3: Translate the Mission into Strategic Goals

Step 4: Formulate a Strategy to Achieve theStrategic Goals

Step 5: Implement the Strategy

Step 6: Evaluate Performance

1-25

Step 1: get the big picture

Understand your business strategy

Highlight the key driving forces of your business?

e.g., technology, distribution, competition.

what are the fundamental people contribution to bottom business performance?

Step 2: develop a mission statement Develop the mission statement that relates to the people side of the

business.

Strategic Management Process

1-26

Step 3: conduct a SWAT analysis of the organization

focus on the internal strengths and weaknesses of

people side of the business

Consider the current skill and capability issue

Highlight the opportunities & threats relating to the

people side of the business

Consider skill shortages

The impact of new technology on staffing levels

Strategic Management Process

1-27

Step 4 : conduct a detailed HR analysis

Concentrate on the organization’s COPS (culture, organization, people, and HR systems)

Consider where you are now & where do you want to be?

What gaps exists between the reality of where you are now and where you want to be?

Step5: determine critical people issues Go back to your business strategy and examine it against your

SOWT and COPS analysis.

Identify where you should be focusing your efforts and resources.

Strategic Management Process