Strategic Management and The Entrepreneur

The document discusses the strategic management process for entrepreneurs. It outlines 9 key steps: 1) develop a clear vision and mission statement, 2) assess strengths and weaknesses, 3) scan for opportunities and threats, 4) identify success factors, 5) analyze competition, 6) set goals and objectives, 7) select strategies, 8) create action plans, and 9) establish controls. The strategies discussed are cost leadership, differentiation, and focus. Implementing this process helps translate plans into action and measure performance against objectives.

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Strategic Management and The Entrepreneur

Uploaded by

Raheel Mansoor

Available Formats

Download as PPT, PDF, TXT or read online on Scribd

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Strategic Management And the

Entrepreneur
The Strategic Management Process

 1. Develop Clear Vision And Translate It in to a Meaningful

Mission Statement
 The vision touches every one associated with the company
 Employees, investors, lenders, customers and community.
 Highly successful entrepreneurs are able to communicate their
vision and their enthusiasm about that vision to those around
them.
 It is a result of an entrepreneur dream of something that does
not exist yet and the ability to paint a compelling picture of that
dream for every one to see
The Strategic Management Process

 Clearly defined vision helps a company in three ways.

 Vision provides direction
 Vision determines decisions
 Vision motivates people

 Mission
 An enduring declaration of a company’s purpose that
addresses the first question of any venture.
 Establishing the purpose of the business in writing must come
first in order to give the company a sense of direction.
The Strategic Management Process

 Element of mission statement

 A sound mission statement need not be lengthy to be
effective
 A well used mission statement serves as a strategic compass
for a small company.

2. Assess The Company’s Strengths And the Weaknesses

 Strengths are positive internal factors that a company can
use to accomplish its mission, goals and objectives.
 Weaknesses are negative internal factors that inhibit the
accomplishment of a company mission, goal and objecives.
The Strategic Management Process

 Strengths should originate in the core competency that are essential to gain
edge in each of the market segment in which the firms compete.

3. Scan the Environment for Significant Opportunity And Threats Facing The
Business
 Opportunities are the positive external options that a firm can exploit to
accomplish its mission, goals and objectives.
 Threats are negative external forces that inhibit a company’s ability to achieve
its mission, goals and objectives.
 Threats to the business can take a variety of forms such as competitors
entering the local market
 A government mandate regulating a business activity
 An economic recession
 Interest rates and technological advances
The Strategic Management Process

4.Identify the Key Factors

 Key factors that determine a company’s ability to compete
successfully in an industry.
 Tight cost control
 Trained, dependable, honest in store manager
 Close monitoring of waste
 Careful site selection
 Maintenance of food quality
 Consistency
 Cleanliness
 Friendly and attentive service.
The Strategic Management Process

5. Analyze the Competition

 Business is like any battle field if you want to win the war, you
have to know who you are up against.
 The primary goals of a competitive intelligence program include
the following
 Avoiding surprises from existing competitors
 Identifying potential new competitors
 Improving reaction tome to competitors actions
 Anticipating rivals next strategic moves
The Strategic Management Process

 Competitor Analysis
 Sizing up the competition gives business owners a more
realistic view of the market and their company’s position in it
 Direct competitors offer the same product and services and
customers often compare prices, features and deals from these
competitors as the shop.
 Significant competitors offer some of the same products and
services although their products or service lines may be
different , there is competition with them in several key areas.
 Indirect competitors offer the same products or services only in
a few areas but their target customers seldom overlap yours.
The Strategic Management Process

 Competitive intelligence exercise enables entrepreneur to

update their knowledge of their competitors
 Who are our competitors
 Where are they located
 How do their cost structures compare to ours
 How do they market their products and services
 What do customers say about them
 What are their key strategies
 What are their strengths
 What are the primary weaknesses\are new competitors
entering the business
The Strategic Management Process

 Knowledge Management
 The practice of gathering, organizing and disseminating the
collective wisdom and experience of a company employees for
the purpose of strengthening its competitive position

6. Create Company Goals And Objectives

 Goals are broad range attributes a business seeks to
accomplish they tend to be general and sometimes even
abstract
 Objectives are more specific targets of performance commonly
addressing areas such as profitability, productivity, growth and
other key aspects of a business.
The Strategic Management Process

 They are more

 Specific
 Measurable
 Assignable
 Realistic
 Timely
 The strategic planning process works best when manager and
employees are actively and jointly involved in setting objectives
 Developing a plan is top management responsibility but
executing it falls to manager and employees
The Strategic Management Process

7. Formulate Strategic Options and Select appropriate Strategies

 Strategy is a road map of t he actions an entrepreneur draws up to
fulfill a company’s mission, goals and objectives
 In other words the mission, goal and objectives spell out the ends and
the strategy defines the means to reach them
 Three Strategic Options
 Cost Leadership Strategy
 In which a company strives to be the low cost producer relative to its
competitors in the industry
 The strategy works well when buyer are sensitive to price changes
when competing firms sell the same commodity products
The Strategic Management Process

 Differentiation Strategy
 Strategy in which a company seeks to build customer loyalty by
positioning its goods or services in a unique or different fashion
 Focus Strategy
 A strategy in which a company selects one or more market
segment identifies customer special needs wants and interests
and approaches them with a good or service designed to excel
in meeting those needs, wants and interests
 The most successful focusers build a competitor edge by
concentrating on specific markets niche and serving them
better than any competitor can
The Strategic Management Process

 Small sized companies must develop strategy that exploit all of

the competitive advantages of their sizes
 Responding quickly to customer needs
 Remaining flexible and willing to change
 Constantly searching for new emerging markets
 Building and defending market niche
 Remaining entrepreneur and willing to take risk
 Constantly innovating
The Strategic Management Process

 8. Translate Strategic Plans In to Action Plans

 No strategic plan is complete until it is put in to action
 Entrepreneurs must convert strategic plans in to operating plans that
guide their company on a daily basis and become visible active part of
the business.
9. Establish Accurate Control
 Planning without control has little operational value therefore a sound
planning program requires a practical control process.
 The plan created in the strategic planning process become the
standard against which actual performance is measured.
 It is important for everyone in the organization to understand and to be
involved in the planning and controlling process.
 To judge the effectiveness of their strategies many companies are
developing balanced scorecards
The Strategic Management Process

 Balanced scorecard is set of measurements unique to a company

that includes both financial and operational measures and gives a
quick yet comprehensive picture of the company’s overall
performance.
 According to one writer
 Is a sophisticated business model that helps a company understand
what really driving its success.
 It acts a bit like the control panel on spaceship
 The business equivalent of a flight speedometer and temperature
gauge all rolled in to one.
 It keeps track of many things including financial progress and softer
measurements.
 Everything from customer satisfaction to return on investment.
 That need to be managed to reach final destination profitable growth.