THE CONCEPT OF STRATEGY AND STRATEGIC MANAGEMENT
G. Tyge Payne, PhD
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Strategic Management
Strategy: The unifying theme that gives coherence and direction to the decisions of an organization Strategic Management: Consisting of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages. Or, the Strategic Management Process is: The full set of commitments, decisions, and actions required for a firm to create value and earn aboveaverage returns. (Hitt, Hoskinson, & Ireland, 2004, p. 4)
Strategic Management basically seeks to answer the question:
How and why do some firms outperform others?
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Other Definitions of Strategy
Oxford Dictionary: The art of war, especially
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– BCG developed the “experience curve” and portfolio analysis concepts. – McKinsey & Company’s development of SBUs and the nine-block matrix. – Mintzberg’s “Deliberate, Emergent & Realized Strategies” – Porter’s Generic Strategies 6
The Evolution of Strategic Management
1950s
DOMINANT THEME
1960s-early 70s Corporate planning
Mid-70s-mid-80s Positioning
Late 80s –1990s Competitive advantage
2000s Strategic innovation
Budgetary planning & control Financial control
MAIN ISSUES
Planning growth &diversification
Selecting sectors/markets. Positioning for leadership Industry analysis Segmentation Experience curve Portfolio analysis
Focusing on sources of competitive advantage
Reconciling size with flexibility & agility
KEY CONCEPTS & TOOLS
Capital budgeting. Financial planning
Forecasting. Corporate planning. Synergy
Resources & Cooperative capabilities. strategy. Shareholder Complexity. value. Owning E-commerce. standards. — Knowledge Management— Alliances & networks Self -organiz ation & virtual organization 7
MANAGEMENT IMPLICATIONS
Coordination & control by Budgeting systems
Corporate planning depts. created. Rise of corporate planning
Diversification. Restructuring. Global strategies. Reengineering. Matrix structures Refocusing. Outsourcing.
Ansoff’s Product / Mission Matrix*
Present Product Present Mission Market Penetration New Product Product
Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of the firm 's objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm 's objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales and production to achieve organisational goals. It is the highest level of managerial activity, usually
See Chapter 1, Exhibit 01: Strategic management consists of the analyses, decisions, and actions an organization undertakes in order to create and sustain competitive advantages:
In simple understanding, strategic management refers to managing the resources so as to achieve the desired objectives and goals of an organization. In broader terms, it can be understood as a continuous process which
Strategic management is the process where leaders establish an organization’s long-term direction, set the specific performance objectives, develop strategies to achieve these objectives in the light of all external and internal changes, and undertake effective strategies to manage these changes and execute action plans.
The purpose of my assignment has been done in terms of strategic analysis, its formulation and implementation of Ryanair organization. The assignment is developed by three parts which includes variety of questions in the each part.
This report demonstrates the evaluation of current performance of JD Sports Company. Method of Analysis includes Ansoff’s matrix and Porter’s generic growth strategies to discuss the nature of the market which JD Sports invest in. The financial methods are including the flexibility and stability of JD sports which judged by the liquidity, current ratio, operation capital, gearing and profit margin of this company. These figures could be collected from the annual report or balance sheet. This report analyzed the JD sport’s position in the market, and used generic and external growth method to expand market size. Such as acquired a lot stores to improve business profitability. Obviously, JD has expanded to the European
Pearce and Robinson describe strategic management as the art of making complex, long-term, future-oriented decisions and taking actions that result in the formulation and implementation of plans designed to achieve a company's objectives. The process focuses on the belief that a firm's mission can be best be achieved through a systematic and comprehensive assessment of both its internal capabilities and its external environment (Pearce & Robinson, 2005). In the article Strategic Management, the strategic management process is described as the implementation of the company's strategy by executive management considering its resources, circumstances, and environment to position the organization to complete is mission in a
What Is Strategic Management a process for defining and addressing the management implications of an organization's strategic and operational plans? A long-term context for short-term activities. Strategic management is the analysis of the work done by the management of an organization on behalf of the owners. It gyrates around expressing the purposes of the organization and coming up with an appropriate mission and vision statement. Mission and vision statement together are used to help develop policies and plans to be used in long term and short term goals often categorized as projects or programs. It also involves the right resources of management to ensure that the business profit are maximized to grow the company. Strategic Competitiveness
Strategic management is a blend of strategy formulation and strategy implementation and together, they provide an overall direction of the organization. It is the highest level of managerial activity, usually performed by an organization’s Chief Executive Officer (CEO) and the leadership team.
Therefore, strategic management is an all-encompassing approach for formulating, implementing and evaluating managerial decisions in a way that permits the business to reach its objectives.
The strategic management is actually defined as the process in which an organization actually formats and also implements the plans which espouse the objectives and goals of that organization (Diana Wicks, 2011). The process of the strategic management is continuous and it changes with the evolution of the organizational goals and objectives.
Globalization changes have impacted Burger King in the following ways; since the company began in 1953 with its first restaurant in Jacksonville, Florida and opened several locations across the United States, the company began its international expansion in 1969 with its first international franchise location in Canada, followed by Australia in 1971, and Europe in 1975. The setting up of franchises outside the United States was as a result of fast food opportunities arising outside the United States. So as to fully integrate in the international market, Burger King had to adopt and embrace
Strategic management or business policy is treated as a means to achieve the organizational purpose. The process of strategic management involves determining the mission and objectives, identifying the opportunities and threats in an environment and evaluating
What are the most significant differences between the planning/design/positioning schools of strategic management and the resource based view?
Future- oriented: Strategic management encompasses forecasts, what is anticipated by the managers. In such decisions, emphasis is placed on the development of projections that will enable the firm to select the most promising strategic options. In the turbulent environment, a firm will succeed only if it takes a proactive stance towards change.