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8/10/2019 Presentation Management
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STRATEGIC
MANAGEMENT
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RAMSHA NASIR
RIDA FAREED
NADIA BARKAT ALI
SAJJAD ALI MUSLIM
MUHAMMAD YAZDAAN AZAM JAFFRI
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WHAT IS STRATEGY
STRATEGIC MANAGEMENT
IMPORTANCE OF STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT PROCESS
TYPES OF ORGANIZATIONAL STRATEGIES
STRATEGIC MANAGEMENT IN TODAYSENVIRONMENT
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Strategies are the decisions and plans that
determine the long term performance of anorganization.
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Strategic management is what managers do todevelop the organizations strategies.
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Strategic management specify theorganizations missions, visions and objectivesby developing policies and plans designed toachieve those objectives.
Managers establish the roadmap for how theorganizations will do whatever it is in thebusiness to do.
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One term which is used in strategicmanagement is the BUSINESS MODEL.
BUSINESS MODEL:A strategic design for how a company
could get profit from its strategies and workactivities.
It focuses on two things.
Whether the customers will value what the
company is providing.Whether the company can make any moneydoing that.
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Dell business of selling computers.
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Performance of an organization.
Uncertainty in environments.
Nature of organizations.
Decision-making of managers.
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Step 1: Identifying the organizationscurrent mission, goals, and strategies
o mission- statement of the purpose of anorganization.
o It defines that what is the business is all
about.o It is important in profit and not-for-profit
organizations
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Step 2: Doing an external analysis
o The environmental scanning of specific andgeneral environments.
o A manager has to examine that what trendsand changes are occurring outside the
organization to cope up with current market
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After analyzing the environment, manager has
to access all his information in terms ofopportunities or threats.
o opportunities- positive trends in theexternal environmental
o threats- negative trends in the externalenvironment
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Step 3: Doing an internal analysis
o In this phase, manager has to look inside theorganizations resources and capabilities.
o Resources: assets, financial, physical andhuman intangible.
o Capabilities: skills and abilities of doing
work activities needed in business.o Core-competencies: the value-creating
capabilities and skills of an organization.
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o After internal analysis, manager should be
able to identify organizational strengths andweaknesses.
strengths- Strengths create value for the
customer and strengthen thecompetitive position of the firm.
weaknessescan place the firm at acompetitive disadvantage.
o Organizational culture i.e strong and weakcultures have different effects on strategies.
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Steps 2 and 3 combined are called a SWOTanalysis. (Strengths, Weaknesses,
Opportunities, and Threats)After this SWOT analysis, managers are ready
to formulate suitable strategies. i.e that
1.utilize an organizations strengths andexternal opportunities.
2. protect organization from external threats.3. correct critical weaknesses.
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Step 4: Formulating strategies
In this managers has to consider all therealities of the external environment andtheir available resources to formulate thestrategies which help the organization to
achieve its goal.
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Step 5: Implementing strategies
o Implementation:effectively fitting toorganizational structure and activities to theenvironment.
o a strategy is only as good as itsimplementation
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Step 6: Evaluating resultsLast step is to assess the result of the process that
o How effective have strategies been?
o Have they helped to reach its goal?
o What adjustments, if any, are necessary?
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Corporate Strategy
Business Strategy
Functional Strategy
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Growth Strategy
Seeking to increase the organizations business by
expansion into new products and markets.Types of Growth Strategies
Concentration:
Focusing on a primary line of business andincreasing the number of products offered ormarkets served.
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Vertical Integration:
Backward vertical integration: attempting to gaincontrol of inputs (become a self-supplier).
Forward vertical integration: attempting to gaincontrol of output through control of the distribution
channel and/or provide customer service activities(eliminating intermediaries).
Horizontal Integration:
Combining operations with another competitorin the same industry to increase competitivestrengths and lower competition among industryrivals.
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Related DiversificationExpanding by merging with or acquiring firms indifferent, but related industries that are strategicfits.
Unrelated Diversification
Growing by merging with or acquiring firms inunrelated industries where higher financial returnsare possible
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Stability Strategy:A strategy that seeks to maintain the status quo to dealwith the uncertainty of a dynamic environment, when the
industry is experiencing slow- or no-growth conditions, orif the owners of the firm elect not to grow for personalreasons.
Renewal Strategy:
Developing strategies to counter organization weaknessesthat are leading to performance declines.
Retrenchment:focusing of eliminating non-criticalweaknesses and restoring strengths to overcome
current performance problems.Turnaround:addressing critical long-term performanceproblems through the use of strong cost eliminationmeasures and large-scale organizational restructuringsolutions.
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BCG Matrix
Developed by the Boston Consulting Group
Considers market share and industry growth rate
Classifies firms as:
Cash cows:low growth rate, high market share
Stars:high growth rate, high market share
Question marks:high growth rate, low market share
Dogs:low growth rate, low market share
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A strategy focused on how an organization shouldcompete in each of its businesses.
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Competitive Advantage:
An organizations distinctive competitive edge.
Quality as a Competitive Advantage:
Differentiates the firm from its competitors.Represents the companys focus on quality
management to achieve continuous improvement andmeet customers demand for quality.
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Sustainable competitive advantage:Continuing over time to effectively exploit
resources and develop core competencies that enable anorganization to keep its edge over its industrycompetitors.
Competitive strategies:
Five competitive forces are:
Threat of new entrants
Threat of substitutes
Regaining power of buyers
Bargaining power of suppliers
Current rivalry
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Cost leadership strategy
Differentiation strategy
Focus strategy
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Similar to Porters generic competitivestrategies
The competitive forces in an industry will create asituation where three companies will dominate amarket.
Some firms in the market become super nicheplayers and while others end up as ditchdwellers.
Firms unable to develop either a cost ordifferentiation advantage become stuck in the
middle and lack prospects for long-term success.
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Used to support the business-level strategy
Creates an appropriate supporting role foreach functional area of the organization
e.g., manufacturing, marketing,
human resources
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Strategic FlexibilityNew Directions in Organizational Strategies
e-business
customer serviceinnovation
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Cost Leadership
On-line activities: bidding, order processing,inventory control, recruitment and hiring
Differentiation
Internet-based knowledge systems, on-line ordering
and customer support
Focus
Chat rooms and discussion boards, targeted web sites
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Giving the customers what they want.
Communicating effectively with them.Providing employees with customer servicetraining.
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Possible EventsRadical breakthroughs in products.
Application of existing technology to new uses.
Strategic Decisions about InnovationBasic research
Product development
Process innovationFirst Mover
An organization that brings a product innovation tomarket or use a new process innovations
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THANK YOU FOR
YOURCONCENTRATION