McGraw-Hill/Irwin 1 1 - 1 000100101001001111010100100010010100100111101010010001001010010011110101 Chapter 1 What Is Strategy and Why Is It Important?

McGraw-Hill/Irwin11 - 1

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Chapter 1

What Is Strategy andWhat Is Strategy andWhy Is It Important?Why Is It Important?

““Without a strategy the Without a strategy the

organization is like a ship organization is like a ship

without a rudder, going without a rudder, going

around in circles.”around in circles.”

Joel Ross and Michael Kami


What Is Strategy? What Does the Strategy-Making, Strategy-Executing

Process Entail? Phase 1: Developing a Strategic Vision Phase 2: Setting Objectives Phase 3: Crafting a Strategy Phase 4: Implementing and Executing the Strategy Phase 5: Evaluating Performance and Initiating Corrective

Adjustments

What Is the Role of the Board of Directors in the Strategy-Making, Strategy-Executing Process?

Why Is Strategy Important?

Chapter OutlineChapter OutlineChapter OutlineChapter Outline


Thinking Strategically:Thinking Strategically:The Three Big Strategic QuestionsThe Three Big Strategic Questions

Thinking Strategically:Thinking Strategically:The Three Big Strategic QuestionsThe Three Big Strategic Questions

1. Where are we now?

2. Where do we want to go?

Business(es) to be in and marketpositions to stake out

Buyer needs and groups to serve

Outcomes to achieve

3. How will we get there?


What Is Strategy?What Is Strategy?What Is Strategy?What Is Strategy?

Consists of the combination of competitive moves and business approaches used by managers to run the company

Management’s “game plan” to Stake out a market position Attract and please customers Compete successfully Conduct operations Achieve organizational objectives


Striving for Competitive AdvantageStriving for Competitive AdvantageStriving for Competitive AdvantageStriving for Competitive Advantage

Central thrust of a company’s strategy involves moves to strengthen a company’s Long-term competitive position and Financial performance

Key components of strategy Offensive moves Defensive moves

What separates a powerful strategy from anordinary one is management’s ability to forge a series of

moves, both in the marketplace and internally, thatproduce sustainable competitive advantage!


Strategic Approaches to Building Strategic Approaches to Building Competitive AdvantageCompetitive Advantage

Strategic Approaches to Building Strategic Approaches to Building Competitive AdvantageCompetitive Advantage

Strive to be the industry’s low-cost provider

Outcompete rivals on a key differentiating feature

Focus on a narrow market niche, doing a better job than rivals of serving the unique needs of niche buyers

Develop expertise, resource strengths, and capabilities not easily imitated by rivals


Fig. 1.1: Identifying aFig. 1.1: Identifying aCompany’s StrategyCompany’s Strategy

Fig. 1.1: Identifying aFig. 1.1: Identifying aCompany’s StrategyCompany’s Strategy


Fig. 1.2: A Company’s Strategy Is Fig. 1.2: A Company’s Strategy Is Partly Planned and Partly ReactivePartly Planned and Partly ReactiveFig. 1.2: A Company’s Strategy Is Fig. 1.2: A Company’s Strategy Is Partly Planned and Partly ReactivePartly Planned and Partly Reactive


Why Do Strategies Evolve?Why Do Strategies Evolve?Why Do Strategies Evolve?Why Do Strategies Evolve?

A company’s strategy is a work in progress

Changes may be necessary to react to

A failing strategy

Shifting market conditions

Evolving customer preferences

Fresh moves of competitors

Technological breakthroughs

Crisis situations


What Is a Business Model? What Is a Business Model? What Is a Business Model? What Is a Business Model?

A business model addresses “How do we make money in this business?” Is the strategy capable of delivering good bottom-line

results? Do the revenue-cost-profit economics of the strategy

make good business sense? Look at revenue streams the

strategy is expected to produce Look at associated cost structure

and potential profit margins Do resulting earnings streams and ROI indicate the

strategy makes sense and the company has a viable business model for making money?


Relationship Between Strategy Relationship Between Strategy and Business Modeland Business Model

Relationship Between Strategy Relationship Between Strategy and Business Modeland Business Model

Strategy - Deals with a company’s competitive initiatives and business approaches

Business Model -Concerns whether revenues and costs flowing from the strategy demonstrate the business can be amply profitable and viable

Strategy

Business

Model


Microsoft’s Business ModelMicrosoft’s Business ModelMicrosoft’s Business ModelMicrosoft’s Business Model

Employ a cadre of highly skilled programmers to develop proprietary code; keep source code hidden from users

Employ a cadre of highly skilled programmers to develop proprietary code; keep source code hidden from users

Sell resulting OS and software packages to PC makers and users at relatively attractive prices and achieve large unit sales

Sell resulting OS and software packages to PC makers and users at relatively attractive prices and achieve large unit sales

Most costs in developing software are fixed; variable costs are small - once breakeven volume is reached, revenues from additional sales are almost pure profit

Most costs in developing software are fixed; variable costs are small - once breakeven volume is reached, revenues from additional sales are almost pure profit

Provide technical support to users at no costProvide technical support to users at no cost


Redhat Linux’sRedhat Linux’sBusiness ModelBusiness ModelRedhat Linux’sRedhat Linux’sBusiness ModelBusiness Model

Rely on collaborative efforts of volunteer programmers to create the software; make source code open and available to all users

Rely on collaborative efforts of volunteer programmers to create the software; make source code open and available to all users

Add value to free, downloadable version of Linux by offering users Red Hat Linux systems containing upgraded and tested features

Add value to free, downloadable version of Linux by offering users Red Hat Linux systems containing upgraded and tested features

Charge a modest fee to those preferring to subscribe to Red Hat Linux versionCharge a modest fee to those preferring to subscribe to Red Hat Linux version

Make money by employing a cadre of technical support personnel who provide technical support to users for a feeMake money by employing a cadre of technical support personnel who provide technical support to users for a fee

Make as much or more money on providing technical support services, training, and consulting as on selling subscriptions to Red Hat Linux

Make as much or more money on providing technical support services, training, and consulting as on selling subscriptions to Red Hat Linux


Figure 1.3: The Strategy-Making, Figure 1.3: The Strategy-Making, Strategy-Executing ProcessStrategy-Executing Process

Figure 1.3: The Strategy-Making, Figure 1.3: The Strategy-Making, Strategy-Executing ProcessStrategy-Executing Process


Develop a Strategic Vision & MissionDevelop a Strategic Vision & MissionDevelop a Strategic Vision & MissionDevelop a Strategic Vision & Mission

Involves thinking strategically about Future of company Where are we going?

Tasks include Creating a roadmap of the future Deciding future business position to stake out Providing long-term direction Giving company a strong identity

Phase 1 of the Strategic Management ProcessPhase 1 of the Strategic Management Process


Strategic VisionStrategic VisionStrategic VisionStrategic Vision

A strategic vision concerns a firm’s future business path -- “where we are going” Markets to be pursued Future technology-product-customer focus Kind of company management is

trying to create


Characteristics of a Strategic VisionCharacteristics of a Strategic VisionCharacteristics of a Strategic VisionCharacteristics of a Strategic Vision

Well-stated vision statements

Are distinctive and specific to a particular organization

Avoid generic language

Excite strong emotions

Are challenging, uncomfortable, nail biting


Example: Vision StatementExample: Vision StatementExample: Vision StatementExample: Vision Statement

To be the customer’s first

choice for communications and

information services in every

market we serve,

domestic and international.

Verizon Communications


We will clothe the world by

marketing the most appealing

and widely worn casual

clothing in the world.

Levi Strauss & Company



Empower people through

great software -- anytime,

anyplace, and on

any device.

Microsoft Corporation



Mayo Clinic

The best care to every patient every day.

To make London thesafest city in the world.

Scotland Yard

Example: Vision StatementsExample: Vision StatementsExample: Vision StatementsExample: Vision Statements


We want to set the tone for the era . . . Green and affordable . . . That means

establishing a new paradigm for harmonizing personal transport with

the environment. It means revolutionary cost savings in products

and production processes.

Toyota



Our vision: Getting to a billion connected computers

worldwide, millions of servers, and trillions of dollars

of e-commerce. Intel’s core mission is being the

building block supplier to the Internet economy and

spurring efforts to make the Internet more useful.

Being connected is now at the center of people’s

computing experience. We are helping to expand the

capabilities of the PC platform and the Internet.

Intel



Greenpeace

To halt environmental abuse and promote environmental solutions.

To be the world’s premier investment bank in every sector.

Goldman Sachs

Example: Vision StatementsExample: Vision StatementsExample: Vision StatementsExample: Vision Statements


We will become number one or

number two in every market we

serve, and revolutionize this

company to have the speed and

agility of a small enterprise.

General Electric



MissionMission

A mission statement focuses on current business activities -- “who we are and what we do” Current product and service offerings Customer needs being served Technological and business capabilities


Characteristics of a Mission Characteristics of a Mission StatementStatement

Characteristics of a Mission Characteristics of a Mission StatementStatement

Defines current business activities, highlighting boundaries of current business Present products and services Types of customers served

Conveys What we do, Why we are here, and Where we are now

A company’s mission is not to make a profit! The real mission is always — “What will we do to make a profit?”


Example: Mission StatementExample: Mission StatementExample: Mission StatementExample: Mission Statement

Our mission: To give our customers the best food and beverage values that they can find

anywhere and to provide them with the information required for informed buying

decisions. We provide these with a dedication to the highest quality of customer satisfaction

delivered with a sense of warmth, friendliness, fun, individual pride, and company spirit.

(a unique grocery store chain)


Communicating the VisionCommunicating the VisionCommunicating the VisionCommunicating the Vision

An exciting, inspirational vision

Contains memorable language

Clearly maps company’s future direction

Challenges and motivates workforce

Provokes emotion and enthusiasm


Linking the Vision Linking the Vision With Company ValuesWith Company Values

Linking the Vision Linking the Vision With Company ValuesWith Company Values

A statement of values is often provided to guide the company’s pursuit of its vision

Values -- Beliefs, business principles, and ways of doing things incorporated into Company’s operations Behavior of workforce

Values statements Contain between four and eight values Are ideally tightly connected to and reinforce

company’s vision, strategy, and operating practices

Values

Values


Example: Company ValuesExample: Company Values

Home Depot

Creating shareholder value

Building strong relationships

Entrepreneurial spirit Excellent

customer service

Giving back to the community

Respect for all people

Doing the right thing

Taking care of people


Du Pont

Safety Ethics

Environmental stewardship

Respect for people

Example: Company ValuesExample: Company Values


Setting ObjectivesSetting ObjectivesSetting ObjectivesSetting Objectives

Converts strategic vision and mission into specific performance targets

Creates yardsticks to track performance

Pushes firm to focus on results

Helps prevent complacency and coasting



Represent commitment to achieve specific performance targets

Well-stated objectives are

Quantifiable

Measurable

Contain a deadline for achievement

Spell-out how much of what kind of performance by when

Characteristics of ObjectivesCharacteristics of ObjectivesCharacteristics of ObjectivesCharacteristics of Objectives


Types of Objectives RequiredTypes of Objectives Required

Outcomes focusedon improving financial performance

Outcomes focused on improving long-term, competitive business position

Financial Objectives Strategic Objectives

$


Examples: FinancialExamples: FinancialObjectivesObjectivesExamples: FinancialExamples: FinancialObjectivesObjectives X % increase in annual

revenues X % increase annually in

after-tax profits X % increase annually in

earnings per share Regular dividend increases Larger gross profit margin Larger operating profit

margin Larger net profit margin X % return on capital

employed (ROCE)

X % return on assets (ROA) X % return on shareholder

investment (ROE) Upward-trending stock

price that builds significant shareholder value over time

Strong bond and credit ratings

Reduced levels of debt Sufficient internal cash

flows to fund new capital investment

Diversified revenue base


Winning additional market share (or reaching X % market share)

Consistently getting new or improved products to market ahead of rivals

Overtaking key competitors on product performance or quality or customer service

Achieving lower overall costs than rivals

Deriving X % of revenues from sale of new products introduced in past 5 years

Being a recognized technological leader

Achieving national or global market coverage for firm’s products

Having broader or more attractive product selection than rivals

Deriving X % of revenues from online sales

Having a better-known or more respected brand name than rivals

Improving global sales and distribution capabilities

Examples: StrategicExamples: StrategicObjectivesObjectivesExamples: StrategicExamples: StrategicObjectivesObjectives


Objective Setting: A Balanced Objective Setting: A Balanced Scorecard ApproachScorecard Approach

Objective Setting: A Balanced Objective Setting: A Balanced Scorecard ApproachScorecard Approach

A “balanced scorecard” for measuring company performance requires both financial objectives and strategic objectives

Company achievement of satisfactory financial performance, by itself, is not enough A company’s financial performance measures are “lagging

indicators” that reflect the results of past decisions and actions

Of equal or greater importance is a company’s performance on the measures of its strategic well-being—its competitiveness and market position

Unless a company’s performance in the marketplace reflects improving competitive strength and market penetration, its progress is less than inspiring and its ability to continue delivering good financial performance is suspect The “lead indicators” of a company’s future financial

performance and business prospects are growing competitiveness and strength in the marketplace


Balanced Scorecard Approach --Balanced Scorecard Approach --Strategic vs. Financial Objectives?Strategic vs. Financial Objectives?

Balanced Scorecard Approach --Balanced Scorecard Approach --Strategic vs. Financial Objectives?Strategic vs. Financial Objectives?

Pursuit of better financial performance may assume priority over strategic performance targets when Firm is struggling financially Resource commitments for new strategic

initiatives may hurt bottom-line for several years Proposed strategic moves are risky

Otherwise, strategic objectives merit top priority — a firm consistently foregoing opportunities to strengthen its long-term competitive position Risks diluting its competitiveness Risks losing momentum in its markets Hurts its ability to fend off rivals’ challenges


Unilever

Example: Strategic andExample: Strategic andFinancial Objectives Financial Objectives


Grow revenues by 5-6 % annually; Increase operating profit margins from 11 % to 16 %

within five years; Trim the company’s 1,200 food, household, and

personal care products down to 400 core brands; Focus sales and marketing efforts on those brands

with potential to become respected, market-leading global brands; and

Streamline the company’s supply chain.


Examples: Strategic Objectives Examples: Strategic Objectives

Banc One Corporation

To be one of the top three bankingcompanies in terms of market share in

all significant markets we serve.

Bristol-Myers Squibb

To focus globally on those businesses inhealth and personal care where we can be

number one or number two through delivering superior value to the customer.


To satisfy our customers by Providing quality cars and trucks, Developing new products, Reducing the time it takes to bring new

vehicles to market, Improving the efficiency of all our plants &

processes, and Building on our teamwork with employees,

unions, dealers, and suppliers.

Ford Motor Company

Example: Strategic Objectives Example: Strategic Objectives


Alcan Aluminum

To be the lowest-cost producer of aluminum and to outperform

the average return on equityof the Standard and Poor’s

industrial stock index.




Annual growth in earnings per share of 10% or better, on average;

A return on stockholders’ equity of 20-25%;

A return on capital employed of 27% or better; and

Have at least 30% of sales come from products introduced in the past four years.

3M Corporation




Short-Range VersusShort-Range VersusLong-Range ObjectivesLong-Range Objectives

Short-Range VersusShort-Range VersusLong-Range ObjectivesLong-Range Objectives

Short-Range objectives Targets to be achieved soon Serve as stair steps for

reaching long-range performance

Long-Range objectives Targets to be achieved within

3 to 5 years Prompt actions now that will

permit reaching targetedlong-range performance later


Concept of Strategic IntentConcept of Strategic IntentConcept of Strategic IntentConcept of Strategic Intent

A company exhibits strategic intent when it relentlessly pursues an ambitious strategic objective and concentrates its competitive

actions and energies on achieving that objective!


Characteristics of Strategic IntentCharacteristics of Strategic Intent

Indicates firm’s intent to stake out a particular position over the long-term

Involves establishing a BHAG – “big, hairy, audacious goal” and then devoting the company’s full resources and energies to achieving it over time (Moon Shot)

Signals relentless commitment to winning in the marketplace


Objectives Are Needed at All LevelsObjectives Are Needed at All LevelsObjectives Are Needed at All LevelsObjectives Are Needed at All Levels

Objective-setting process is mostly top-down, not bottom-up!

1. First, establish organization-wide objectives and performance targets

2. Next, set business andproduct line objectives

3. Then, establish functionaland departmental objectives

4. Individual objectives are established last


Strategy-making involves entrepreneurship – searching for opportunities To do new things or To do existing things in new or better ways

Strategizing involves Picking up on happenings in the external

environment and Steering company activities in new directions

dictated by shifting market conditions


Crafting a StrategyCrafting a StrategyCrafting a StrategyCrafting a Strategy


Activities Involved inActivities Involved inCrafting a StrategyCrafting a Strategy

Studying market trends and actions of competitors

Listening to customers, anticipating their changing needs

Scrutinizing business possibilitiesbased on new technology

Building firm’s market positionvia acquisitions or new products

Pursuing ways to strengthenfirm’s competitive capabilities

Our strategy will be . . .


How to grow the business

How to please customers

How to outcompete rivals

How to respond to changing market conditions

How to manage each functional piece of the business and develop needed organizational capabilities

How to achieve strategic and financial objectives

Strategy is HOW

to . . .

The The HowsHows That ThatDefine a Firm's Strategy Define a Firm's Strategy

The The HowsHows That ThatDefine a Firm's Strategy Define a Firm's Strategy


Linking Strategy With EthicsLinking Strategy With EthicsLinking Strategy With EthicsLinking Strategy With Ethics

A company’s ethics and high moral standards go beyond Merely complying with laws and regulations

A strategy that exemplifies high ethical and moral standards addresses Issues of duty and What is morally responsible What it is “right” to do

and not do A strategy is not ethical

unless it can pass moral scrutiny


A Firm’s Ethical ResponsibilitiesA Firm’s Ethical Responsibilitiesto Its Stakeholdersto Its Stakeholders

A Firm’s Ethical ResponsibilitiesA Firm’s Ethical Responsibilitiesto Its Stakeholdersto Its Stakeholders

Owners/shareholders – Rightfully expect some form of return on their investmentOwners/shareholders – Rightfully expect some form of return on their investment

Employees - Rightfully expect respect for their worth and devoting their energies to firmEmployees - Rightfully expect respect for their worth and devoting their energies to firm

Customers - Rightfully expect a seller to provide them with a reliable, safe product or serviceCustomers - Rightfully expect a seller to provide them with a reliable, safe product or service

Suppliers - Rightfully expect to have an equitable relationship with firms they supplySuppliers - Rightfully expect to have an equitable relationship with firms they supply

Community - Rightfully expect businesses to be good citizens in their communityCommunity - Rightfully expect businesses to be good citizens in their community


What Is a Strategic Plan?What Is a Strategic Plan?

Where firm is headed -- Strategic vision and business mission

Action approaches to achieve targeted results -- A comprehensive strategy

Short and long term performance targets -- Strategic and financial objectives


Who Participates in CraftingWho Participates in Craftinga Company’s Strategy?a Company’s Strategy?

Senior corporate executives

Managers of business units and major product lines and key VPs

Functional area managers

Operating managers


Strategizing: An IndividualStrategizing: An Individual or Group Responsibility? or Group Responsibility?

Teams are increasingly used because Finding market- and customer-driven solutions

is necessary

Complex strategic issues cut across functional areas and departmental units

Ideas of people with differentbackgrounds and experiences strengthen strategizing effort

Groups charged with crafting thestrategy often include the peoplecharged with implementing it


Figure 1.4: A Company’sFigure 1.4: A Company’sStrategy-Making HierarchyStrategy-Making HierarchyFigure 1.4: A Company’sFigure 1.4: A Company’sStrategy-Making HierarchyStrategy-Making Hierarchy


Corporate Strategy

Business Strategies

Functional Strategies

Operating Strategies

Two-Way Influence

Corporate-Level Managers

Business-Level Managers

OperatingManagers

Functional Managers

Levels of Strategy-MakingLevels of Strategy-Makingin a Diversified Companyin a Diversified CompanyLevels of Strategy-MakingLevels of Strategy-Makingin a Diversified Companyin a Diversified Company

Two-Way Influence

Two-Way Influence


Levels of Strategy-Making in Levels of Strategy-Making in a Single-Business Companya Single-Business Company

Levels of Strategy-Making in Levels of Strategy-Making in a Single-Business Companya Single-Business Company

Business Strategy

Two-Way Influence

Functional Strategies

Operating Strategies

Business-Level Managers

OperatingManagers

Functional Managers

Two-Way Influence


Tasks of Corporate StrategyTasks of Corporate StrategyTasks of Corporate StrategyTasks of Corporate Strategy

Moves to achieve diversification

Actions to boost performance of individual businesses

Capturing valuable cross-business synergies to provide 1 + 1 = 3 effects!

Establishing investment priorities and steering corporate resources into the most attractive businesses


Initiating approaches to produce successful performance in a specific business

Crafting competitive moves to build sustainable competitive advantage

Developing competitively valuable competencies and capabilities

Uniting strategic activities of functional areas

Gaining approval of business strategies by corporate-level officers

Tasks of Business StrategyTasks of Business StrategyTasks of Business StrategyTasks of Business Strategy


Game plan for a strategically-relevant function, activity, or business process

Detail how key activities will be managed

Provide support for business strategy

Specify how functional objectives are to be achieved

Tasks of Functional StrategiesTasks of Functional StrategiesTasks of Functional StrategiesTasks of Functional Strategies


Concern narrower strategies for managing grassroots activities and strategically-relevant operating units

Add detail to businessand functional strategies

Tasks of Operating StrategiesTasks of Operating StrategiesTasks of Operating StrategiesTasks of Operating Strategies


Uniting the Company’sUniting the Company’sStrategy-Making EffortStrategy-Making EffortUniting the Company’sUniting the Company’sStrategy-Making EffortStrategy-Making Effort

A firm’s strategy is a collection of initiatives implemented by managers at all organizational levels

Separate levels of strategy must be unified into a cohesive, company-wide action plan

Pieces of strategy should fit together like the pieces of a puzzle


Tests of a Winning StrategyTests of a Winning Strategy

GOODNESS OF FIT TEST

How well is strategy matchedto firm’s situation?

COMPETITIVE ADVANTAGE TEST

Does strategy lead to sustainablecompetitive advantage?

PERFORMANCE TEST

Does strategy boost firm performance?


Action-oriented, operations-driven activity aimed at shaping performance of core business activities in a strategy-supportive manner

Tougher and more time-consumingthan crafting strategy

Key tasks include Improving the competence and

efficiency of the strategy being executed

Showing measurable progress in achieving targeted results


Implementing and Executing StrategyImplementing and Executing StrategyImplementing and Executing StrategyImplementing and Executing Strategy


What Does Strategy Implementation What Does Strategy Implementation and Execution Include?and Execution Include?

What Does Strategy Implementation What Does Strategy Implementation and Execution Include?and Execution Include?

Building a capable organization Allocating resources to strategy-critical activities Establishing strategy-supportive policies Instituting best practices and programs for

continuous improvement Installing needed information, communication, and

operating systems Motivating people to pursue the target objectives Tying rewards to achievement of results Creating a strategy-supportive corporate culture Exerting the leadership necessary to drive the

process forward and keep improving


Tasks of crafting and implementing the strategy are not a one-time exercise Customer needs and competitive

conditions change New opportunities appear; technology

advances; any number of other outside developments occur

One or more aspects of executing thestrategy may not be going well

New managers with different ideas take over

Organizational learning occurs

All these trigger the need for corrective actions


Evaluating Performance andEvaluating Performance andInitiating Corrective AdjustmentsInitiating Corrective Adjustments

Evaluating Performance andEvaluating Performance andInitiating Corrective AdjustmentsInitiating Corrective Adjustments


Monitoring, Evaluating, and Monitoring, Evaluating, and Adjusting as NeededAdjusting as Needed

Taking actions to adjust to the march of events tends to result in one or more of the following

Altering long-term direction and/or redefining the mission/vision

Raising, lowering, or changingperformance objectives

Modifying the strategy

Improving strategy execution


Strategic Role of aStrategic Role of aBoard of DirectorsBoard of Directors

Critically appraise and ultimately approve strategic action plans

Evaluate strategic leadership skills of the CEO and candidates to succeed the CEO


Why Is Strategy Important?Why Is Strategy Important?Why Is Strategy Important?Why Is Strategy Important?

A compelling need exists for managers to proactively shape how a firm’s business will be conducted

A strategy-focused firm is more likely to be a strong bottom-line performer than one that views strategy as secondary


Good Strategy + Good Strategy Good Strategy + Good Strategy Execution = Good ManagementExecution = Good ManagementGood Strategy + Good Strategy Good Strategy + Good Strategy Execution = Good ManagementExecution = Good Management

Crafting and executing strategy are core management functions Among all the things managers do, nothing affects a

company’s ultimate success or failure more fundamentally than how well its management team charts the company’s direction, develops competitively effective strategic moves and business approaches, and pursues what needs to be done internally to produce good day-in/day-out strategy execution

Excellent execution of an excellent strategy is the best test of managerial excellence -- and the most

reliable recipe for winning in the marketplace!


Benefits of a “Strategic Approach”Benefits of a “Strategic Approach”to Managingto Managing

Benefits of a “Strategic Approach”Benefits of a “Strategic Approach”to Managingto Managing

Good strategic thinking and good management of the strategy-making, strategy-executing process

Guides entire firm regarding “what it iswe are trying to do and to achieve”

Helps unify numerous strategy-related decisions across the company

Creates a proactive atmosphere Promotes development of an

evolving business model focused on bottom-line success

Provides basis for determining how best to allocate company resources

Documents

McGraw-Hill/Irwin 1 1 - 1 000100101001001111010100100010010100100111101010010001001010010011110101 Chapter 1 What Is Strategy and Why Is It Important?