Harambe University

Strategic Management
Demes Mered/ Phd, Assistant Professor
Contents for the Course Strategic Management

Chapter 1: An Overview of Strategic Management

 Definitions of Strategy
 Levels of Strategy (briefly)
 Characteristics of Strategic decisions
 Advantages and challenges of Strategic Management
 Strategic-Management Process Model
Chapter 2: Basic Components of Strategic Management
 Creating a Vision
 Outlining the Mission
 Values, and strategic issues
 Setting Goals and Objectives
 Strategic plan
Contents for the Course for Strategic Management
Chapter 3: Environmental Analysis
 Internal Environmental Analysis
 SWOT Analysis
 Functional analysis
 Value chain analysis
 External Environmental Analysis
 General (PESTE/STEPE)
 Industrial Analysis (Porter’s five force model)
 Competitor Analysis
Chapter 4: Formulation of Strategy
 Corporate level strategy
 Major corporate strategies (growth, stability & defensive)
 Portfolio analysis (BCG & GE-Matrix)
 Business level strategy
 The five generic competitive strategy
 Functional Level Strategy (Reading Assignment)
Contents for the Course for Strategic Management
Chapter 5: Strategy Implementation, Control and Evaluation
 Correlation between strategic formulation and implementation
 Requirements for Implementation (components and skills needed)
 Problems of Implementation
 7- S model/Framework
 types of evaluation system
 Steps in controlling and evaluation system ,

Chapter 6: Management of Strategic Change

 The Meaning of Change
 The Need for Change
 The Nature of Change
 Factors that Cause Change
 Managing Strategic Change
 Force-Field Analysis
 Lewin's 3-Step Model
 Resistance to Change
Contents for the Course for Strategic Management

Chapter 7: Managing Creativity and Innovation

 Defining Creativity and Innovation
 The Importance of Creativity and Innovation
 Stimulating Individual and Group Creativity
 Organizational Creativity and Innovation
 Establishing a Climate for Organizational Creativity
Assessment Policy

•Article Review and presentation 30%

• Case Analysis or term paper 20%
• Final exam 50%
• Total 100%
 Chapter One

An Overview of Strategic Management

 1.1. Meaning and Concepts of Strategy
STRATEGY:
* From the Greek word ‘Strategia’
* Strategia means the art of being a general (plan to defeat the enemy)
* Currently, the concept of strategy is being used as a basic instrument to achieve agreed
goals and objectives
• 
Definition of Strategy:
* Strategy refers to the formulation of basic organizational mission, purpose, policy and
program strategies to achieve organizational goals.
 1.1. Meaning and Concepts of Strategy
A more comprehensive definition of strategy (Quinn, 1980)
* Strategy as a pattern or plan to integrate the organization’s major goals, policies, and
action sequences into a cohesive whole,
* Strategy as a tool to organize and allocate an organization’s resources in a viable way
based on its internal competencies and shortcomings, anticipated changes in the
environment, and contingent moves by intelligent opponents,
* Strategic decisions as major policies that guide the entity’s overall direction and posture or
that determine its viability.
 1.2. Terminologies

* Goals/objectives state what is to be achieved and when results are to be accomplished,

but they do not state how the results are to be achieved.  
* Policies are rules or guidelines that express the limits within which action should occur.
 
* Programs specify the step-by-step sequence of actions necessary to achieve major
objectives within the limits set by the policy. 
* Strategic decisions are those that determine the overall direction of an enterprise and
its ultimate viability in light of the predictable & unpredictable changes that may occur
in its most important environment.
 1.3. Definitions of Strategic Management

Different researchers have proposed different definitions of for strategic

management concept:
* St. Mgt. represents the senior mgt. responsibility for defining the
organization’s mission, formulating strategies, and guiding long-term
organizational activities consistent with internal & external conditions.
* St. Mgt. is the decision that aligns the organization’s internal capability
with the opportunities and threats it faces in its environment.
* St. Mgt. is concerned with deciding on strategy & planning how that
strategy is to be put into effect via: strategic analysis, strategic choice, &
strategic implementation.
 1.3. Definitions of Strategic Management

According to Pearce II & Robinson:

* St. Mgt. is defined as the set of decisions & actions that result the formulation &
implementation of plans designed to achieve organization’s objectives.
 1.4. Major Steps of Strategic Management
It comprises nine critical tasks:
 Formulate the organization’s mission, including broad statements about its purposes, philosophy, &
goals;
 Develop an organizational profile that reflects its internal conditions and capabilities;
 Assess the organization’s external environment,
 Analyze the organization’s internal environment;
 Identify the most desirable options by evaluating each option in light of the organization’s mission;
 Select a set of long-term objectives & grand strategies
 Develop annual objectives & short-term strategies;
 Implement the strategic choices by means of budgeted resource allocations in which the matching of
tasks, people, structures, technologies, & reward systems is emphasized;
 Evaluate the success of the strategic process as an input decision making.
1.5. Levels of Strategy
1.5. Level of Strategies
 1.5. Levels of Strategy

Corporate strategy:
 Corporate strategy refers to the overall strategy of an organization that is made up of multiple business units,
operating in multiple markets. It determines how the corporation as a whole supports and enhances the value
of the business units within it; and it answers the question, "How do we structure the overall business?“
Corporations can do this by:
• Building strong internal competences.
• Developing strong relationships in teams and between teams.
• Developing a set of robust values that everyone in the organization can get behind.
• Sharing technologies and resources between departments and teams.
• Raising capital from investors.
• Developing and nurturing a strong corporate brand.
 1.5. Levels of Strategy
Corporate strategy:

• So, at this level of strategy, we are concerned with thinking about how the business units
within the corporation should fit together, and understanding how resources should be
deployed to create the greatest possible value.

• Tools like Porter's Generic Strategies, the Boston Matrix, the ADL Matrix and 

VRIO Analysis will help with this type of high-level analysis and planning.

• The organization's design is another important strategic factor that needs to be considered

at this level.

• How you structure your business, your people, and other resources.
 1.5. Levels of Strategy
Business strategy:
 It is found in the middle of the decision making hierarchy and composed mainly of business
& corporate managers.
 It is concerned with a single strategic business unit (SUB) and how each business attempts
to achieve its mission within its chosen area of activity.
 Managers at this level translate the statements of direction and intent generated at the
corporate level into concrete objectives & strategies for individual SUBs.
 The strategy is directed towards identifying products or services that should be developed
and offered to selected markets; and taking care of meeting the customer’s needs whilst
achieving the objectives of the organization.
 1.5. Levels of Strategy
Functional strategy:
 It is found at the bottom of the decision making hierarchy composed of mainly of managers
of product, geographic, and functional areas.
 This strategy is implemented in order to support the business strategy by each functional
area.
 Functional level decisions are concerned with how to implement new technologies, develop
new products, open new markets, expand new facilities, and institute new human resource
programs.
A Comprehensive Strategic-Management Model
The framework for Strategic Management

The framework for St. Mgt. involves a nine-step process:  

1. Creating a vision for the organization
2. Outlining the missions & legal mandates that define the organization
3. Examining internal factors that influence its performance
4. Examining external factors that influence its performance
5. Examining the trends & potential futures of the organization
6. Setting goals for improving organizational performance over a specified period
7. Designing a strategic plan for reaching the goals set
8. Implementing or operationalizing the strategic plan
9. Evaluating both ongoing activities & the final outcomes
 Advantages & Disadvantages of St. Mgt

Advantages:
 Prevent or mitigate the effects of risks
 Helps the mgrs. to discharge their responsibilities since they know what is expected of them
 Encourages & permits to evaluate alternative courses of action
 It reveals & clarifies the SWOT analysis
 It provides an overall framework for decision making & resource allocation effectively
 Serves as a means of communicating objectives, strategies, & detailed operating plans
 It helps managers' master change
 It provides a basis for measuring qualitative performance – creativity, innovation, imagination, motivation
 It keeps the org. invariably tied with its customers & stakeholders and provide relevant service to the
society it stands for
 It makes the organization a learning-organization whereby others consider it as a model to be followed
Advantages & Disadvantages of St. Mgt

Disadvantages:
 The difficulties of forecasting the uncertain future accurately
 The involvement of long-term period
 The complexity of the environment to be forecasted and the complex relations involved between
environmental variables
 The limitations of the data available & the distrust of mgt. techniques applied such as forecasting,
modeling, cost analysis & operational research
 The costly endeavor of the St. mgt process that entails the use of specialists, taking up mgt. time,
requiring the support of many individuals and even other orgs.
 The rapidity and novelty of environmental change (the main leading forces of change are
globalization, resource scarcity, & technological revolution).
 Hence, the survival & success of organizations can be guaranteed with new creativity & innovation
End of the Chapter