Management 13th edtion by schermerhorn bachrach chapter 10

John R. Schermerhorn, Jr.

10

Daniel G. Bachrach

Management
th
13 edition

Chapter 10
Strategy and Strategic Management


Planning Ahead — Key Takeaways
 Discuss the process and importance of strategic management.
 Identify the essential elements in strategic analysis.
 Explain alternative corporate strategies.
 Explain alternative business-level strategies.
 Describe the foundations for strategy implementation.

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Chapter 10 Outline
1.

2.

Strategic Management



Competitive advantage



Strategy and strategic intent



Levels of strategy



Strategic management process

Essentials of Strategic Analysis



Analysis of mission, values, objectives



SWOT analysis of organization and environment



Five forces analysis of industry attractiveness



Strategic management process

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Chapter 10 Outline
3.

4.

Corporate-Level Strategy Formulation



Portfolio planning model



Growth and diversification strategies



Retrenchment and restructuring strategies



Global strategies



Cooperative strategies

Business-Level Strategy Formulation



Competitive strategies model



Differentiation strategy



Cost leadership strategy



Focus strategy

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Chapter 10 Outline

5.

Strategy Implementation



Management practices and systems



Strategic control and corporate governance



Strategic leadership

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Strategic Management

 Basic concepts of strategy:
Competitive advantage — ability to do something so well that one outperforms
competitors

Sustainable competitive advantage — one that is difficult or costly for
competitors to imitate

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Strategic Management

 Sources of competitive advantage
Technology
Cost and quality
Knowledge and speed
Barriers to entry
Financial resources

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Strategic Management

 Basic concepts of strategy:
Strategy
 a comprehensive plan guiding resource allocation to achieve long-term organization
goals

Strategic intent
 focusing all organizational energies on a unifying and compelling goal

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Strategic Management

 Levels of strategies
Corporate
 Sets long-term direction for the total enterprise

Business

 How a division or strategic business unit will compete in its product or service domain

Functional
 Guides activities within one specific area of operations

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Figure 10.1 Three levels of strategy in organizations- corporate,
business, functional strategies

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Strategic Management

 Strategic Management Process:
Strategic management
 the process of formulating and implementing strategies to accomplish long-term goals
and sustain competitive advantage

Strategic analysis
 process of analyzing the organization, the environment, its competitive position and
current strategies

Copyright ©2015 John Wiley & Sons, Inc.


Figure 10.2 Strategy formulation and implementation in the strategic
management process

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Strategic Management

 Strategy formulation
The process of creating strategy
Involves assessing existing strategies, organization, and environment to
develop new strategies and strategic plans capable of delivering future
competitive advantage

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Strategic Management

 Strategy implementation
The process of allocating resources and putting strategies into action
All organizational and management systems must be mobilized to support and
reinforce the accomplishment of strategies

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Essentials of Strategic Analysis

Strategic Questions

• What is our business mission?

• Who are our customers?
• What do our customers value?
• What have been our results?
• What is our plan?

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Essentials of Strategic Analysis

 Analysis of mission:
The reason for an organization’s existence
Good mission statements identify:
 What are we moving to?
 What is our dream?
 What kind of difference do we make?
 What do we want to be known for?

An important test of the mission is how well it serves the organization’s
stakeholders

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Essentials of Strategic Analysis

 Stakeholders
Individuals and groups directly affected by the organization and its strategic
accomplishments

An important test of the mission is how well it serves the organization’s
stakeholders

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Figure 10.3 How external stakeholders can be valued as strategic constituencies in an
organization’s mission statement

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Essentials of Strategic Analysis

 Analysis of Core values:
Broad beliefs about what is or is not appropriate behavior
Organizational culture reflects the predominant value system of the
organization as a whole

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Essentials of Strategic Analysis

 Analysis of objectives:
Operating objectives are specific results that organizations try to accomplish

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Essentials of Strategic Analysis

Typical operating objectives of a business
include:

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Profitability
Sustainability
Social responsibility
Financial health
Cost efficiency
Product quality
Market share
Human talent
Innovation

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Essentials of Strategic Analysis

 Analysis of organizational resources and capabilities:
Core competency is a special strength that gives an organization competitive
advantage

Important goal of assessing core competencies

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Essentials of Strategic Analysis

Potential core competencies:

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Special knowledge or expertise
Superior technology
Efficient supply chains
Unique product distribution systems

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Essentials of Strategic Analysis

 SWOT Analysis
Examination of an organization’s current position by looking at

 Internal strengths and weaknesses
 Environmental opportunities and threats

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Figure 10.4 SWOT analysis of strengths, weaknesses, opportunities,
and threats

Copyright ©2015 John Wiley & Sons, Inc.