BASIC CONCEPT OF : STRATEGY & STRATEGIC MANAGEMENT

BASIC CONCEPT OF : STRATEGY & STRATEGIC

MANAGEMENTSlide Presentation by : Riema Afriani

STRATEGIC MANAGEMENT

RAK_IM Telkom_MM Eks 23_CSBD MODULE_ 2009

3 central questions in thinking strategically

STRATEGIC MANAGEMENT

1) Where are we now ? (swot)2) Where do we want to go ? (target)3) How will we get there ? (strategy?)

The History of “Strategy”

STRATEGIC MANAGEMENT

has been borrowed from the military in the military, strategy is same with tactics strategy often refers to maneuvering troops into

position before the enemy is actually engaged “strategy is the art as a means to gain the object

of war"

A combination of the words stratos, which meant “army”, and agein meaning “to lead”.

Greek Language (6th century BC)

What is Strategy?

Process of formulating, implementing, and evaluating, strategies to accomplish long-term goals and sustain competitive advantage.

Strategic Management

Basic ConceptsSTRATEGIC MANAGEMENT

What is strategy? Strategy as positioning. Strategy as visioning

Strategic Management? Set of managerial decisions and actions

that determines the long-run performance of a firm.

The Essence of Strategy (Thompson & Strickland,2001)

STRATEGIC MANAGEMENT

Selecting one position that a company can claim as its own

A Strategic Position is simply the sum of company’s answers to the questions :1. Who should the company target as customers ?2. What products or services should the company

offer the targeted customers ?3. How the company efficiently conduct

business ?

The Essence of Strategy (Wheelen & Hunger,2008)

STRATEGIC MANAGEMENT

Describe your company’s mission statement, vision and values…

4 Phases ofStrategic Management

Basic financial planning Forecast-based planning Externally-oriented planning Strategic management

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Challenges to Strategic Management

Globalization◦ Internationalization of markets and

corporationsElectronic Commerce

◦ Use of the Internet to conduct business transactions

Ethics and Governance

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Basic Model of Strategic Management

Four Basic Elements

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Environmental Scanning

The monitoring, evaluating, and disseminating of information from the external and internal environments to key people within the firm.

STRATEGIC MANAGEMENT

Opportunities & Threats (External)

Analysis of Trends:• Economic• Social• Cultural• Demographic/Environmental• Political, Legal, Governmental• Technological• Competitors

Environmental Scanning

Strengths & Weaknesses (Internal)

Typically located in functional areas of the firm• Management• Marketing• Finance/Accounting• Production/Operations• Research & Development• Computer Information Systems

Environmental Scanning

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Strategy Formulation

Development of long-range plans for the effective management of environmental opportunities and threats in light of corporate strengths and weaknesses.

STRATEGIC MANAGEMENT

Vision Statement –What do we want to become?

Mission Statement –What is our business?

Strategy Formulation

To be the happiest place on earth.

To be the world’s best quick service restaurant.

Vision Examples

The Bellevue Hospital, with respect, compassion, integrity, and courage, honors the individuality and confidentiality of our patients, employees, and community, and is progressive in anticipating and providing future health care services.

Mission Statement Example

-- The Bellevue Hospital

Strategy Implementation

Programs

Budgets

Procedures

Strategy Evaluation & Control

Internal Review

External Review

Measuring Performance

Strategic audit

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Goals & Objectives

◦ Profitability (net profits)◦ Growth (increase in total assets, etc.)◦ Utilization of resources (ROE or ROI)◦ Market leadership (market share)

STRATEGIC MANAGEMENT

ELEMENTS OF A DYNAMIC STRATEGYFind unique strategic position in current industry

Make transition from old position to new

Manage old & new positions simultaneously

Compete in this position by becoming better than industry competitor

Search for new strategic positions

Jump in to different industry, repeat process

"Effective managers live in the present – but concentrate on the future." (James L. Hayes )    

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