STRATEGIC MANAGEMENT

The Art and Science of Formulating Implementing & Evaluating Cross-Functional Decisions that Enable the Organization to Achieve its Objectives.

Strategic Management DEFIND:

Focus on Integrating various Disciplines

Strategic Management and Strategic Planning -Originated in 1950s- Popular in 60s & 70s
-did not yield results in 1980s -revival in 1990s

Strategic Management DEFIND:

THE PURPOSE; - To Exploit and Create New and Different Opportunities -In contrast the Long-Range Planning Tries to Optimize for Tomorrow the Trends of Today

Strategic Management DEFIND:

SM- Historical Aspects Strategic Plan - a Game Plan

STAGES OF SM; 1. Formulating Strategies 2. Implementing Strategies 3. Evaluating Strategies

KEY TERMS IN SM

COMPETITIVE ADVANTAGE -A Distinguishing Characteristic -It is something which a firm does WELL compared to Rival Firms STRATEGISTS

KEY TERMS IN SM

VISION -What do we want to become? -Future Orientation -One sentence statement (Often) - Global Leadership in Education, Certification, and Practice of Management Accounting and Financial Management

KEY TERMS IN SM

Mission Statements;

Statements of Purpose that DISTINGUISHES one business from Other Similar firms

KEY TERMS IN SM
EXTERNAL OPPERTUNITIES and THREATS

-They are TREND and EVENTS that could significantly BENEFIT OR HARM an organization in the Future

KEY TERMS IN SM: Opportunities and Threats

These Trends and Events can be Categorized as follows: -Economic -Social -Political -Cultural -Demographic -Environmental -Legal -Technological -Governmental -Competitive

KEY TERMS IN SM: Opportunities and Threats

They are beyond the Control of a Single Organization Trends and Events at Present (Major Oppertunities and Threats): -Population Shifts -Wireless Revolution -Biotechnology -Diversity -Changing Work Values, Attitudes -Increased Competition from Foreign Companies

KEY TERMS IN SM: Opportunities and Threats

Trends and Events at Present (Major Opps and Threats): (Cont.) -Passage of Law -Natural/ National Catastrophe -Competitors Launches New Product -Inflation- Declining Value of Rupe

KEY TERMS IN SM: Opportunities and Threats

Different Types of Customer Different Types of Products and Services Different Types of Strategies

KEY TERMS IN SM: Opportunities and Threats

Taking Advantage of External Opportunities Avoid or Reduce the Impact of External Threats Environmental Scanning (Industry Analysis): Gathering and Using External Information ,Conducting Research

Internal Strengths and Weaknesses

KEY TERMS IN SM:

Organizations Controllable Activities in all Departments Determined in RELATION to the Competitors (relative Superiority or Deficiency)
e.g., Ownership of Natural Resources Reputation for Quality

Internal Strengths and Weaknesses

KEY TERMS IN SM:

Strengths & Weaknesses in Relation to Organizational Objectives -High Level of Inventory Turnover for a firm that wants never to be Stocked Out

Internal Strengths and Weaknesses

KEY TERMS IN SM:
How to Determine the Internal Factors: -Employee Surveys about. Production Efficiency, Employee Morale, Customer Loyalty -Measuring Performance -Comparing to Past Periods -Comparing to Industry Averages -Computing Ratios

KEY TERMS IN SM: LONG-TERM OBJECTIVES

Specific Results that an Organization seeks to Achieve in Pursuing its Mission (1) More than One Year Objectives -State Direction and Priorities -Focus Coordination -Basis for Effective Management -Functions -Should be Challenging, Reasonable, Measurable, Consistent and Clear

KEY TERMS IN SM: STRATEGIES

Strategies are the Means by which Long-Term Objectives will be Achieved Strategies include: Geographic Expansion Product Development Market Penetration Retrenchment Diversification, Acquisition Divestiture, Liquidation Joint Venture

KEY TERMS IN SM:

STRATEGIES

Strategies have Multifunctional Consequences

Strategies require Consideration of both the External and Internal Factors which an organization faces

KEY TERMS IN SM:

ANNUAL OBJECTIVES

A set of annual objectives is needed for each Long-Term Objective -they are the Short milestones to be accomplished to reach the LT Objective They are important in Strategy Implementation
Annual Objectives should be Stated in terms of ACCOMPLISHMENTS .should be established at ALL LEVELS

KEY TERMS IN SM:

POLICIES

Policies are Guidelines to Decision Making. They Address Repetitive Situations They are important in Strategy Implementation

Policies include Rules and Procedures to Support Efforts to Achieve Objectives

KEY TERMS IN SM:

POLICIES

Policies Outline an organizations of its employees and Managers

Expectations

Consistency and Coordination within and between various departments

No Smoking policy- it is mostly derived from Annual Objective of Reducing Company Medical Costs and Absenteeism

STRATEGIC-MANAGEMENT MODEL

Vision, Mission External Audit Internal Audit Long-Term Objectives Strategies ( Generate, Evaluate, Select ) Strategies (Implement- Management Issues ) Strategies (Implement- Other Issues..) Performance Measure and Evaluate

STRATEGIC-MANAGEMENT MODEL

A Change in any Component necessitate Change in Any or All of the other Components e.g.,- Change in Economy.. - Failure to Accomplish Annual Objective - Change in Competitors Strategy

STRATEGIC-MANAGEMENT MODEL

Every organization has a Vision, Mission, Objectives and Strategies even if they are not Consciously Designed, Written or Communicated

BENEFITS OF SM

To Exert Control over its (Firms) own Destiny Using of more Systematic, Logical and Rational Approach to Strategic Decisions Proactive Approach for shaping the Future of the firms

Firms start Initiating rather than acting passively and just responding

BENEFITS OF SM

Managers and Employees Understand What the firm is Doing and Why- it makes them feel the Part of the organization and thus they become More Committed. Achieving Understanding and Commitment of all the Employees and the Managers

BENEFITS OF SM

FINANCIAL BENEFITS NON-FINANCIAL BENEFITS

-Increased Employee Productivity -Enhanced Awareness of External Threats -Clearer Understanding of PerformanceReward Relationship -Understanding of Competitors Strategies -Reduced Resistance to Change

VISION STATEMENT

The vision statement answers the questions, WHERE DO WE WANT TO GO? WHAT DO WE WANT TO BECOME?

A picture of your company in the future

Unlike the mission statement, a vision statement is for you and the other members of your company, not for your customers or clients.

VISION STATEMENT

While a vision statement doesnt tell you how youre going to get there, it does set the direction for your business planning What you are doing when creating a vision statement is Expressing your dreams and hopes for your business

VISION STATEMENT

WHAT DO WE WANT TO BECOME? Examples: General Motors To be the World Leader in Transportation Products and Related Services Procter & Gamble: To be and be Recognized as, the Best Customer Products Company in the world

VISION STATEMENT

WHAT DO WE WANT TO BECOME? Examples: DELL CORP. To Create a Company Culture where Environmental Excellence is Second Nature SAMSONITE: To Provide Innovative Solutions for the Traveling World

VISION STATEMENT

BOC PAKISTAN LIMITED BOCPL is the first choice of its customers, with clear market leadership in the Industrial Gases / Healthcare businesses and its other related fields.

VISION STATEMENT

HUB POWER COMPANY LTD. To be energy leader- committed to deliver growth through energy OGDCL To be a leading multinational Exploration and Production Company.

MISSION STATEMENT

Mission Statement is a brief description of a company's fundamental purpose. A mission statement answers the questions,
"WHY DO WE EXIST? WHAT IS OUR BUSINESS?

MISSION STATEMENT

The mission statement Expresses the company's purpose both for those in the organization and for the public.

MISSION STATEMENT

The difference between a mission statement and a Vision Statement is that a mission statement focuses on a companys present state while a vision statement focuses on a companys future.

MISSION STATEMENT
WHAT IS OUR BUSINESS? = WHAT IS OUR MISSION?

Statement of PURPOSE It DISTINGUISH one organization from Other Similar organizations It is a Reason for Being (for any firm)

MISSION STATEMENT: COMPONENTS

1.CUSTOMERS 2.PRODUCTS or SERVICES 3.MARKETS 4.TECHNOLOGY 5.CONCERN FOR SURVIVAL, GROWTH and PROFITABILITYfirms commitment to Growth and Financial Stability

MISSION STATEMENT: COMPONENTS

6. PHILOSOPHY: Basic Beliefs, Values, Ethical Priorities 7. SELF-CONCEPT: Firms major Competitive Advantage 8. CONCERN FOR PUBLIC IMAGE: Firms responses to Social and Environmental Issues 9. CONCERN FOR EMPLOYEES: To what extent the human resource is Valued

MISSION STATEMENTS
DELL CORP.
2.PRODUCTS or SERVICES : To be the most Successful Computer Company 3.MARKETS: In the World

1.CUSTOMERS: At Delivering the best Customer Experience in Market we Serve

MISSION STATEMENTS
4.TECHNOLOGY: In doing so Dell will Meet Customer Expectations of Higher Quality; Leading Technology 6. PHILOSOPHY: Competitive Pricing; Individual and Company Accountability

MISSION STATEMENTS
7. SELF-CONCEPT Best in Class Service and Support Flexible Customization Capability

8. CONCERN FOR PUBLIC IMAGE: Superior Corporate Citizenship

5. CONCERN FOR SURVIVAL, GROWTH and PROFITABILITY: Financial Stability

How to Write Mission Statement? 1) Describe what your company does.

1) Describe what your company does. My company's purpose is to: MS1. Sell shoes MS2. Provide educational services

MS3. Grow market vegetables

How to Write Mission Statement?

2) Describe how you do it

2) Describe how you do it we're not looking for a detailed description of your business's physical operations here; we're looking for a description of how your business operates generally.

incorporating one or more of your core values into your description.

How to Write Mission Statement?

Think of/list the core values that are important to you that are expressed in your business. Provide high product quality Provide superior customer service Protect the quality of the environment Ensure equal access to resources Encourage innovation/creativity Practice sustainable development

How to Write Mission Statement? Focus on your business's Core Competencies when you're considering which values are worthy of being a part of your mission statement.

How to Write Mission Statement?

Once you've decided which core values are most important, add one (or two at the most) to your description of what your company does.

How to Write Mission Statement? Sample MSs

-My company's purpose is to: Sell shoes of the highest quality -Provide educational services that allow all children to experience learning success

-Grow market vegetables using organic, sustainable farming practices

How to Write Mission Statement? 3) Add why.

3) Add why.
When you write a mission statement, this is the part that describes your spark, or the passion behind your business. Why does your business do what it does? For some people, it helps to think back on why they started their business in the first place.

How to Write Mission Statement? 3) Add why.

My company's purpose is to: -Sell shoes of the highest quality so every customer can find a pair of shoes they actually love to wear.

-Provide educational services that allow all children to experience learning success and become life-long earners and contributing members of our community.

How to Write Mission Statement? 3) Add why.

Grow market vegetables using organic, sustainable farming practices to give people safe and healthy food choices. ("At Earth's Bounty, we grow market vegetables in a way that's good for the earth and good for the table.)

How to Write Mission Statement?

4) Put your mission statement to work.

4) Put your mission statement to work. Besides directing your business planning, you want your mission statement to be in front and center in the minds of everyone who works in your business and communicated to customers and/or clients.

How to Write Mission Statement?

4) Put your mission statement to work.

As the statement of why you exist, it's also the statement that explains to them (Clients) why they would want to do business with you.

How to Write Mission Statement?

4) Put your mission statement to work.

you should make sure your mission statement is highly visible in your business premises on your website and on all your marketing materials.

How to Write Mission Statement?

4) Put your mission statement to work.

A good mission statement isn't just a slogan, it's an operations manual

Process of Developing VS & MS

Selection of Articles Reading by the Managers Managers Prepare Vision and Mission Statements Top Managers/Facilitators Merge them into a Single Document Distribution among the managers Modification, Addition and Deletion -with Meeting for the Revision

Process of Developing VS & MS

Discussion Groups Outside Consultant Emotional Bond Videotape explaining the Statements and How they were Prepared.

(Assignments)

Benefits of Vision and Mission Statements

Mission Statement-A Declaration of Attitude -A Declaration of Social Policy

Customer Orientation

Do not Offer me Things Do not Offer me Clothes. Offer me Attractive Looks Do not Offer me Shoes. Offer me Comfort for my Feet and the Pleasure of Walking Do not Offer me Books. Offer me benefit of Knowledge and hours of Pleasure Do not Offer me House. Offer me Security