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STRATEGIC MANAGEMENT & BUSINESS POLICY
11 TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 1
Basic Conceps
o! S"ae#icMana#e$en
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Basic Conceps o! S"ae#ic Mana#e$en
Strategic Management
Set of managerial decisions and actionsthat determines the long-run performanceof a firm.
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Basic Conceps o! S"ae#ic Mana#e$en
% P&ases in &e E'o()ion o! S"ae#icMana#e$en
1. Basic financial planning – internal focus onbudgeting 1 !r "ori#on$
2. %orecast-based planning – e&trapolate t"e current
situation into t"e future 3-' !r "ori#on$3. (&ternall!-oriented planning – planning depart)ent
and*or consultants de+elop a top-don strateg! it"no loer le+el in+ol+e)ent.
. trategic )anage)ent – in+ol+es +ariousdepart)ents and le+els across t"e organi#ation. /nongoing process t"at includes i)ple)entation,e+aluation and control issues.
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Basic Conceps o! S"ae#ic Mana#e$en
Hi#&(* Rae+ Bene!is
learer sense of strategic +ision
"arper focus on strategic i)portance
I)pro+ed understanding of c"angingen+iron)ent
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Basic Conceps o! S"ae#ic Mana#e$en
No A(,a*s a -o"$a( P"ocess
"ere is t"e organi#ation no not"ere do e "ope it is$
If no c"anges are )ade, "ere ill t"eorgani#ation be in 1, 2, ' or 10 !ears
"at specific actions s"ould
)anage)ent underta4e "at are t"e ris4s and pa!offs
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Mos Pop)(a" Mana#e$en Too(s
2003 ur+e!
trategic Planning – 57
8ission*9ision tate)ents – 57
Basic Conceps o! S"ae#ic Mana#e$en
:eal 9alue
trategic ;"in4ing
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Basic Conceps o! S"ae#ic Mana#e$en
G(oa(i/aionIne"naiona(i/aion o! $a"0es an+ co"po"aions
G(oa( ,o"(+,i+e2 $a"0es "a&e" &an naiona($a"0es
E(ec"onic Co$$e"ceUse o! &e Ine"ne o con+)c )siness"ansacions
Basis !o" co$peiion on a $o"e s"ae#ic (e'e( "a&e"&an "a+iiona( !oc)s on p"o+)c !ea)"es an+ coss
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Re#iona( T"a+e O"#ani/aions
(uropean ?nion (?$ – 2' )e)ber nations pro)ote
607 local content to a+oid tariffs
@ort" /)erican %ree ;rade /gree)ent @/%;/$ –
anada, 8e&ico and ? 62.'7 local content.
8ercosur*8ercosul – out" /)erican eAui+alent of
@/%;/
entral /)erican %ree ;rade /gree)ent /%;/$ – dut!
free te&tiles, consu)er goods and far) e&ports.
/ssociation of out" (astern /sian @ations /(/@$ –
less poerful due to due to "ine, apan and Corea
e&clusion.
Basic Conceps o! S"ae#ic Mana#e$en
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E(ec"onic Co$$e"ce 33 T"en+s
-o"cin# co$pan* "ans!o"$aion 4 netor4ing of suppliers, custo)ers and partners
Ma"0e access 5 "an+in# c&an#in# 4 disinter)ediation of traditional distribution c"annels
Ba(ance o! po,e" s&i! o cons)$e" 4 access to )an! options and co)parati+e s"opping
Co$peiion c&an#in# 4 due to lo barriers to entr!
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Basic Conceps o! S"ae#ic Mana#e$en
E(ec"onic Co$$e"ce 33 T"en+s
Pace o! )siness inc"easin# 4
dog !ears D Internet !ears
Ine"ne p)s&in# co$panies e*on+"a+iiona( o)n+a"ies 4
suppl! c"ain )anage)ent and +irtual
co)panies 6no,(e+#e 0e* asse 4
source of co)petiti+e ad+antage
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Population (colog! +s. Institutional ;"eor!
anEt "ange$ 8i)ic successful organi#ations$
trategic "oice Perspecti+e
8anage)ent decisions "a+e atleast as )uc" i)pact as industr! factors$
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7S)saina(e Co$peii'e A+'ana#e +oesn8(ie in +o##e+(* !o((o,in# a cen"a((* $ana#e+
9 *ea" s"ae#ic p(an ) in s"in#in# o#e&e"
a se"ies o! s"ae#ic s&o" e"$ &")ss:
:ic"ard FE/+enti – H!perco)petition
Basic Conceps o! S"ae#ic Mana#e$en
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Lea"nin# O"#ani/aion
is s4illed at creating, acAuiring and transferring 4noledgeand )odif!ing its be"a+ior to reflect ne 4noledge and
insig"t.
Ce! /cti+itiesG – ol+e proble)s s!ste)aticall!
– (&peri)ent it" ne approac"es
– =earn fro) e&perience – ;ransfer 4noledge t"roug"out t"e organi#ation
Basic Conceps o! S"ae#ic Mana#e$en
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O"#ani/aiona( 6no,(e+#e – ;ec"nical 4ills – researc"
– %unctional 4ills – )anufacturing and )ar4eting
– 8anagerial (&pertise – plan, organi#e, influence and
control
Basic Conceps o! S"ae#ic Mana#e$en
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Basic Conceps o! S"ae#ic Mana#e$en
Basic (le)ents of t"e trategic8anage)ent Process
B i C ! S i M
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Basic Conceps o! S"ae#ic Mana#e$en
En'i"on$ena( Scannin#
Monitoring, evaluation, and disseminatinginformation from external and internalenvironments –to key people in the firm
E i ( S i
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En'i"on$ena( Scannin#
SWOT Ana(*sis
trengt"s – ea4nesses
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Basic Conceps o! S"ae#ic Mana#e$en
S"ae#* -o"$)(aion
Development of long-range plans for
effective management of opportunitiesand threats in light of corporatestrengths and weaknesses
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S"ae#* -o"$)(aion
Mission Sae$en
Purpose*reason for organi#ation
Pro)otes s"ared e&pectations
o))unicates public i)age
"o e are "at e do "at e
aspire to
G ( 5 O; i
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Goa(s 5 O;eci'es
Co"po"ae Goa(s
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Goa(s 5 O;eci'es
Co"po"ae Goa(s
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Basic Conceps o! S"ae#ic Mana#e$en
Hie"a"c&* o! S"ae#*
Co"po"ae s"ae#* 4 #ene"a( +i"ecion
sai(i*= #"o,&= "e"enc&$en2
B)siness s"ae#* 4 in+)s"* o" $a"0e se#$en!oc)s
co$peii'e 's. coope"ai'e2
-)nciona( s"ae#* 4 !)nciona( p(annin# os)ppo" &e Co"po"ae an+ B)siness s"ae#*.
ec&no(o#* (ea+e" o" !o((o,e"2
Basic Conceps o! S"ae#ic Mana#e$en
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S"ae#* I$p(e$enaion
Process y which strategies and policies are
put into action through development of
programs and procedures
Basic Conceps o! S"ae#ic Mana#e$en
Basic Conceps o! S"ae#ic Mana#e$en
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S"ae#* I$p(e$enaion
P"o#"a$s 4 sin#(e )se p(ans p"o;ecs2
B)+#es 4 coss associae+ ,i& a p"o#"a$
P"oce+)"es 4 s*se$ o! se?)enia( seps &a
+esc"ie &o, a pa"ic)(a" as0 o" ;o is o e
+one
Basic Conceps o! S"ae#ic Mana#e$en
Basic Conceps o! S"ae#ic Mana#e$en
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(+aluation and ontrol
Process y which corporate activities and
performance results are monitored so that
actual performance can e compared with
desired performance.
Basic Conceps o! S"ae#ic Mana#e$en
Basic Conceps o! S"ae#ic Mana#e$en
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Punctuated (Auilibriu)
!orporations usually take "# – $% years
efore making a significant change in
strategy orientation
Basic Conceps o! S"ae#ic Mana#e$en
Basic Conceps o! S"ae#ic Mana#e$en
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T"i##e"in# E'en @e (<
(&ternal Inter+ention
;"reat of c"ange in oners"ip
Perfor)ance ap
trategic inflection point industr!$
Basic Conceps o! S"ae#ic Mana#e$en
S"ae#ic Decision Ma0in#
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S"ae#ic Decision Ma0in#
S"ae#ic Decisions
Ra"e 4 )n)s)a(= no p"ece+en
Conse?)enia( 4 co$$i s)sania( "eso)"ces
Di"eci'e 4 se p"ece+ens !o" +ecision $a0in#
S"ae#ic Decision Ma0in#
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S"ae#ic Decision Ma0in#
Min/e"#8s Mo+es
En"ep"ene)"ia( $o+e 4 !o)n+e"s 'ision
A+api'e $o+e 4 7$)++(in# &"o)#&: "eaci'e2P(annin# $o+e 4 s*se$aic #a&e"in# an+
ana(*sis o! in!o"$aion
Lo#ica( inc"e$ena(is$ 4 ine"aci'e s"ae#*+e'e(op$en P(annin# @ A+api'e2
Basic Conceps o! S"ae#ic Mana#e$en
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Basic Conceps o! S"ae#ic Mana#e$en
trategic
Fecision-8a4ing
Process
Ha$"ic0 an+ -"e+"ic0son 4 Goo+ S"ae#*
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Ha$"ic0 an+ -"e+"ic0son 4 Goo+ S"ae#*
9 E(e$ens o! Goo+ S"ae#*
1. A"enas 4 W&e"e
. Ve&ic(es 4 Ho, o #e &e"e
. Di!!e"eniao"s 4 Ho, o ,in
%. Sa#in# 4 Spee+ an+ se?)ence 3 acics
9. Econo$ic (o#ic 4 Ho, ,i(( ,e #ain a "e)"n
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STRATEGIC MANAGEMENT & BUSINESS POLICY
11 TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 1
Basic Conceps
o! S"ae#ic
Mana#e$en