First Part of 1.2
Group 1 Presentation:Strategic Management in ActionBy Mary Coulter Group Members:Mark Beal, Adrienne Collins, Jessica Drummond, Mike Sanchez, Mario Santos, Spencer Thomas, Alec Wegmann
1Chp.1 Introducing the concepts of Strategic ManagementWhy it is important
What it is
Impacting factors2Why is Strategic Management Important?Individual Importance: Everyone in an organization is somehow involved in strategic management Understanding strategic decisions will enable you to do you job well, have your work valued, and be rewarded for your work
3Why is Strategic Management Important? Two of the most fundamental business questions relate back to strategy: why firms succeed or fail why firms have varying levels of performance Organizations that use strategic management tend to have higher levels of performance or profits
4Why is Strategic Management Important? Situations are continually changing internally and externally; being able to adapt to these situations and achieve expected performance is challenging Strategic management helps coordinate activities from various levels and departments; creating a more efficient organization
5Example: The importance of strategic management during the current recession Managers noticed that consumers no longer wanted to buy pens or paper in bulk. So the company created displays to sell individual sharpies and small packs of paper, which proved successful. 6
Strategic Management can be found in almost every sector of any given business
Some Examples:Texas Techs head coaching decisions.Blockbusters attempts to compete with Netflix.Or Disneys ever continuing global expansions tactics.7Why do similar companies differ in success? Because of their strategy/strategic management.Wal-Mart and Kmart both founded in 1962.Wal-Mart: The worlds largest and most successful retailer.Kmart: The largest retailer to seek Chp.11 bankruptcy. 8Strategizing Outside the Box3M has all employees take an hour of each work day to brainstorm new product ideas.The Post-it note was one of the products that resulted 9
Four Characteristics of Strategic Management1. Interdisciplinary all areas of the business are involved.
2. External Focus involves the interactions of the company with the economy, competitors, customers, etc.10Four Characteristics of Strategic Management3. Internal Focus assessing the organizations resources and capabilities. Such as all-star employees.
4. Future Direction Companies must make projections about their future position to create a successful strategy.
11The Strategic Management ProcessA process that implies sequential and interrelated activities leading to some outcome. These activities include:Situation AnalysisStrategy FormulationStrategy ImplementationStrategy Evaluation
12Situation Analysis Analyzing the Current SituationScanning and evaluating:The current organizational context The economy, the role of stakeholders, the dynamics of change, the role of the organizational culture and missionExternal environment competitors, economy, customers, trendsAnd organizational environment resources, distinctive capabilities, core competencies 13Strategy Formulation Developing and choosing appropriate strategies as guided by the results of situation analysis.3 Main Types of Strategies:1. Functional Strategies2. Competitive Strategies3. Corporate Strategies141. Functional StrategiesUsing functional areas, resources and capabilities to support the corporate and competitive strategies.15Most common functional areas:Production-Operations (Manufacturing)Marketing Research and DevelopmentHuman resourcesFinancial AccountingInformation Systems Technology and Support
16Functional AreasAcademicsStudent Services (health, housing, and hospitality)Financial ServicesFacilities ManagementAthletics Alumni Relations
2. Competitive StrategiesGoal-directed plans and actions that are concerned with how an organization competes in a specific business or industry.
The competitive strategies and advantages an organization currently has or wants to develop.18Competitive StrategyAbercrombie and Fitch has strategies to compete with:American Eagle OutfittersGapJ. CrewOther specialty clothing retailers. 19
3. Corporate StrategiesWhat business(es) to be in and what to do with those businesses.
20Corporate StrategyCompetes with a portfolio of more than 3,000 beverages.
Coca-Cola Products A - Z21
Strategy Implementation Putting the various strategies into action.
It is not enough to just formulate a great strategy, it must be implemented.
Involves evaluating both the outcomes of the strategies and how they have been implemented.If the evaluation determines that the strategic goals are not being met, then the strategy may need to be modified.
23Looking at Strategic Managements PastThe history of strategic management helps us better understand how and why todays managers implement strategic management.The history ranges from great military battles to current research.
Strategys Military Roots Strategy can be seen in historical decisions and actions used by military organizations.
Blitzkrieg a lighting swift attack by mobile forces, named after the German WWII strategy.
25Academic Origins of Strategic ManagementAs a field of study, strategic management is relatively young.
Most of its theoretical foundation comes from economics and organization studies.
26Strategic Planning and Strategic Management Emerge1960s - One correct way to manage in all situations was replaced by contingency approaches.
1970s and 1980s - Researchers tried to understand and describe strategic management.
27Whos Involved with Strategic Management?Employees at all organizational levels play a role in developing, implementing, and changing strategy.
The Board of DirectorsTop ManagementOther Managers and Organizational Employees28AC28The Board of DirectorsThe Board of Directors is an elected group that represents a companys shareholders.
Responsibilities:Review and approve strategic goals and plans.Review and approve the organizations financial standards and policies.Select, evaluate, and compensate top-level managers.Etc.
29AC29Home Depots BoardCompany shareholders were vocal about the unhappiness with the previous CEOs pay and performance.Bonnie G. Hill, the longest-serving director on Home Depots board, met with stockholders and listened to their complaints.The Board of Directors decided to link the pay of current CEO Frank Blake to the companys performance.30AC
30The Role of Top ManagementAn organizations top manager is typically the chief executive officer (CEO). The CEOs top management team usually includes:COOCFOCIOOther executive or senior managers.
31AC31Strategic LeadershipThe ability to anticipate, envision, maintain flexibility, think strategically, and work with others in the organization to initiate changes that will create a valuable future for the organization.
Samsung Electronics-Changing its Leadership Team after financial scandal in 2008.32AC
32Effective Strategic LeadershipMaintaining Core CompetenciesDeveloping Human CapitalCreating Strong Organizational CultureEmphasizing Ethical DecisionsEstablishing Balanced ControlsDetermining Organizations POV33Strategic LeadershipDetermining Organizations Purpose/VisionReason for existenceBill Ford and the creation of the Ford U CarFords vision is to respect their past accomplishments but lead the way in the future.34MB
34Exploiting and Maintaining Core CompetenciesValue adding to the company
Wal-Mart and the recession
35Developing Human CapitalRetention
36Creating and Sustaining a Strong Organizational CultureBest Buy CEO Brian Dunn
Focus on the team and local growth
Proven itself in this recession37MB
37Emphasizing Ethical DecisionsKeeps the company in a positive PR position
Johnson & Johnson Credo38MB
38Establishing Appropriately Balanced ControlsCurb the actions of the company in the direction of the objectiveTwo TypesFinancial (accounting based and typically short-term)Strategic (exchanging information)A balance of the two is required39MB39Other Managers and Organizational EmployeesStrategic ResponsibilitiesImplementation Actually doing the job and completing the objective.EvaluationLower levels of the organization hierarchy tend to do this: this is when the processes to complete the objective are evaluated to see their effectiveness. iPhone, Dev Center, and Forum
40MB40Three Factors Impacting Strategic ManagementGlobalization
E-Business41Global Economy & GlobalizationBenefitsEconomicSocial
ChallengesCurrent state of economyOpennessInterdependence between trading nations
MarioChallenges of OpennessOpen to the good and badBreaks down geographic barriers between countriesIncreased sensitivity to political and cultural differences?Interdependence of trading countriesDomino effectWorld Trade OrganizationWorld Bank GroupInternational Monetary Fund (IMF)
43Challenge of Cultural & Political DifferencesCultural differencesReligion, beliefs, traditions, etcEx. Nike and the Muslim culture
Must be sensitive to cultural and political differencesAwareness of how decisions & actions will be viewed by ALLAdjust to diverse views
Negative views of capitalism
Corporate GovernanceObserves how a company uses its resourcesProtects stakeholders interestSarbanes-Oxley ActEnron, Tyco, WorldcomBillions of dollars lost in 18 monthsChanged Role o