WEEK 5

TEXT CHAPTER 9

STRATEGIC MANAGEMENT

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
Review of Week 3: Environment
The Firm’s 3 Environments

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PESTEL for external environmental analysis

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Porter’s Five Forces Model of Industry Competition

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Chapter 9: The Strategic Process: Achieving and
Sustaining Competitive Advantage
After reading chapter 9, you should be able to answer these questions:

9.1 What is the strategic management process?

9.2 What is the difference between a firm’s vision and its mission?
9.3 Why is strategic analysis important to strategy formulation?
9.4 What are strategic objectives, levels of strategy, and a grand strategy? How
are they related?
9.5 How and why do managers plan? Why are goals important in the planning
process?
9.6 How and why do managers evaluate the effectiveness of strategic plans?
Chapter 9 – The Strategic Management Process: Achieving and
Sustaining Competitive Advantage
Learning outcomes
Lecture 1 Part A
9.1 What is the strategic management process?
9.2 What is the difference between a firm’s vision and its mission?
9.3 Why is strategic analysis important to strategy formulation?
Lecture 1 Part B
9.4 What are strategic objectives, levels of strategy, and a grand strategy? How are they related?
9.5 How and why do managers plan? Why are goals important in the planning process?
9.6 How and why do managers evaluate the effectiveness of strategic plans?
9.1 Strategic Process

START HERE

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9.2 The Firm’s Vision & Mission
• A vision (why) statement is a general
statement about the firm’s values
• A mission (how) statement gives a broad
description of how to make the vision a reality

• An objective (what) will we do

EXAMPLES OF
VISION
STATEMENTS
ACTIVITY – 20 Minutes
 In small groups, choose a
business
 Find its vision and
mission statement.
(Check corporate
websites and annual
reports.)
 Discuss the relevance of
the vision and mission to
the company’s
operations and brand
image.
Examples
e.g. Disney’s Strategic Path (vision, mission, objective)

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9.3 Strategic Analysis (revisited)

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 Summary Quiz of Part A – 20 Minutes
1. What activities make up the strategic management process?
2. What does a mission statement explain about a firm that a vision statement does
not?
3. What are the similarities and differences between vision and mission?
4. What strategic analysis tools from Week 3 topic would a manager use when
planning a strategy for an existing business?

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 Summary of Lecture 4 Part A
• The strategic management process is the set of activities that firm managers undertake to put
their firms in the best possible position to compete successfully in the marketplace. Strategic
management is made up of several distinct activities: developing the firm’s vision and mission;
strategic analysis; developing objectives; creating, choosing, and implementing strategies; and
measuring and evaluating performance.
• A firm’s vision is a broad statement expressing the reason for the firm’s existence and what it
hopes to accomplish. The mission statement explains (still broadly) how the firm intends to fulfill
its vision—for example, by stating what products or services the firm will offer or what customers
it wants to serve.
• Strategic analysis produces information that managers need in order to develop appropriate
strategies for their firms. A good strategy should use a firm’s resources and capabilities to stake
out a position in the marketplace that sets it apart from competitors and enables it to successfully
compete in the external environment.
Individual Time – 10 Minutes

Questions?

Next Assignment: Part A1.2: Final Business Report (Individual)

(2000 words) worth 25 marks is due
before 8pm Sunday 27 August 2023 (Week 8)
See you in session B!
Chapter 9 – The Strategic Management Process: Achieving
and Sustaining Competitive Advantage
Learning outcomes
Lecture 1 Part A
9.1 What is the strategic management process?
9.2 What is the difference between a firm’s vision and its mission?
9.3 Why is strategic analysis important to strategy formulation?
Lecture 1 Part B
9.4 What are strategic objectives, levels of strategy, and a grand strategy? How are they related?
9.5 How and why do managers plan? Why are goals important in the planning process?
9.6 How and why do managers evaluate the effectiveness of strategic plans?
9.4 Strategic objectives, levels of strategy, and grand
strategy
Strategic objectives are the big-picture goals for the company: they
describe what the company will do to try to fulfill its mission.
Strategic objectives are usually some sort of performance goal—for
example, to launch a new product, increase profitability, or grow
market share for the company’s product.
9.4 Levels of strategy
Business Level Strategy
• Cost leadership
• Differentiation

Corporate strategy is the broadest level of strategy, and is concerned

with decisions about growing, maintaining, or shrinking very large
companies.
Think
Link
Share
YOU’RE NO DOUBT AWARE THERE IS FIERCE COMPETITION BETWEEN THE THREE MAJOR SUPERMARKET CHAINS, ALDI, COLES AND
WOOLWORTHS. GIVEN THESE ORGANISATIONS COMPETE IN THE SAME INDUSTRY, SHARE MANY EXTERNAL ENVIRONMENTAL FACTORS,
AND HAVE GOALS THAT RELATE TO PROFIT, MARKET SHARE, CORPORATE SOCIAL RESPONSIBILITY YOU MAY THINK THEY WOULD FOLLOW
SIMILAR STRATEGIES TO GAIN COMPETITIVE ADVANTAGE. THIS OF COURSE ISN’T SO.

1. DESCRIBE HOW EACH OF THE FOLLOWING TWO COMPETITIVE STRATEGIES IS USED TO GAIN COMPETITIVE ADVANTAGE:

a. Cost leadership
b. Differentiation

COST LEADERSHIP: AIM IS TO GAIN COMPETITIVE ADVANTAGE BY BEING THE LOWEST COST PRODUCER IN THE INDUSTRY
DIFFERENTIATION: AIM IS TO DIFFERENTIATE THE ORGANISATION’S GOODS AND OR SERVICES IN WAYS CUSTOMERS VALUE

2. USING THE EXAMPLES OF BOTH ALDI AND WOOLWORTHS, IDENTIFY WHICH STRATEGY OR STRATEGIES (ORGANISATIONS CAN PURSUE
MORE THAN ONE) YOUR TEAM THINKS EACH OF THESE ORGANISATIONS FOLLOWS TO GAIN COMPETITIVE ADVANTAGE. PROVIDE
REASONS FOR YOUR CHOICE(S) OF COMPETITIVE STRATEGY/IES EACH PURSUES.
9.4 BCG
Matrix
One tool that corporate
strategists use to understand
how each of their businesses
contributes to the
corporation as a whole is the
BCG Matrix

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9.4 Translating Grand Strategies into Objectives
(MBO) & Actions Grand Strategic Potential
Strategy Objective Action
Increase business revenue •Introduce a new product.
Business-Level Growth
by 25% •Expand to a new location.

•Acquire a competitor.
Increase corporate •Expand to a new country.
Corporate-Level Growth revenue by 10% •Develop a business in a new
industry.
•Export products to that
Attract 10% overall market country.
International Growth share in a new country •Acquire a local company in
that country to gain their
customers.

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9.5 Planning Firm Actions to Implement Strategies
When managers create strategies, they are making plans for how their
firm will compete in the marketplace and what actions the firm will
have to undertake to compete.

A plan is a decision to carry out a particular action in order to achieve a

specific goal. A plan includes decisions about when and how actions
should be accomplished and what resources will be required to
complete the actions.
9.5 SMART Goals. A goal is something that you are trying to
accomplish, and any firm will have many items on its list of
things to accomplish.

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Individual
Activity –
SMART
THINK OF SOMETHING YOU WOULD LIKE TO ACHIEVE IN THE NEXT FEW MONTHS
AND WRITE YOUR OWN SMART GOAL TO ACHIEVE IT.

GOALS
YOU CAN START WITH A VAGUE GOAL LIKE: I WANT TO GET GOOD GRADES. THEN
MAKE IT SMART LIKE THIS: TO ACHIEVE GRADES OF AT LEAST 75% IN MY FOUR
UNITS IN TRIMESTER 2, 2023 BY COMPLETING 2 HOURS OF REVISION EACH WEEK
AND SUBMITTING ALL ASSESSMENTS ON TIME.
IT DOES NOT HAVE TO BE AN ACADEMIC GOAL. IT COULD RELATE TO SOMETHING
IN YOUR PERSONAL LIFE – YOUR HEALTH (RELATED TO EXERCISE, DIET OR
MENTAL HEALTH), YOUR HOBBIES, RELATIONSHIPS, YOUR CURRENT CASUAL OR
PART-TIME JOB ETC.
POST YOUR GOAL IN THE COLLABORATIVE SPACE ON MOODLE (WEEK 5). FEEL
FREE TO READ AND COMMENT ON YOUR CLASSMATES’ GOALS!
9.5 The Planning Cycle
Planning

Controlling Planning
Benchmarking

Leading
Organising
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Coordinating
9.5 Levels of Strategic Planning

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9.6 Measuring and Evaluating Strategic Performance
The last step in the strategy cycle is measuring and evaluating
performance. A company’s actions need to be measured so that
managers can understand if the firm’s strategic plans are working.
e.g. 3 ways to support a differentiation strategy
& measure results
Performance
Strategic Plan Tactical Plan Operational Plan Measure
Product Innovation
Hire three engineers to Number of new
differentiation develop new products. products launched

Improve customer service

Product Increase customer with hiring and training Customer complaints
per 10,000 products
differentiation satisfaction program for customer sold
service associates.

Reduce defective products

Product Quality by improving Defect rate per 10,000
differentiation improvement manufacturing process units produced
accuracy.

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 Summary Quiz of Part B – 20 Minutes
1. What strategic actions do you think a store like Target can undertake to survive in
the current retail industry?
2. What are the three levels of planning, and what kinds of plans do managers
develop at each level?
3. Why is performance evaluation critical in strategic planning?

Melbourne Institute of Business and Technology Pty Ltd trading as Deakin College
CRICOS Provider Codes: Deakin College 01590J, Deakin University 00113B
 Summary of Lecture 5 Part B
• Strategic objectives are the big-picture goals for the company: what the company will do to try to fulfill its
mission. These goals are broad and are developed based on top management’s choice of a generic
competitive strategy and grand strategy for the firm.
• Grand strategies outline an approach to firm growth. The three grand strategies are growth, stability, and
defensive, and a firm chooses one of these approaches in addition to their choice of business-level,
corporate, and/or international strategies. The choice of grand strategy is often dictated by conditions in the
business environment such as recessions or competitor activities.
• Planning details become more specific as the manager moves downward in the hierarchy of planning levels.
Strategic planning is the responsibility of firm leadership (CEO), while unit or division managers take the
CEO’s broad plans and focus them to be more suitable for their own units (tactical planning).
• Performance evaluation is to determine if plans have been successful and identify any changes that might be
necessary. This is done both at the end and the beginning of strategic planning because when managers
measure firm activities and progress towards objectives, the information they learn by doing that
measurement becomes part of the analysis they use to develop improved plans and objectives to keep the
firm on track to fulfill their mission and improve their overall performance.
Individual Time – 10 Minutes

Questions?

Next Assignment: Part A1.2: Final Business Report (Individual)

(2000 words) worth 25 marks is due
before 8pm Sunday 27 August 2023 (Week 8)
What Next?

Next week: Week 6

 Read Chapters 2 & 16 of text

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