Strategy; a set of related actions that managers take increased

their companys performance.

Strategic leadership is concerned with managing the strategy
making this to increase the performance of a company, thereby
increasing the value of the enterprise to its owners, it and it
shareholders.
1.2 Determinants of Shareholder Value
Profitability
(ROIC)
Effectiveness
Of Strategies
Profit
Growth

Shareholder
Wealth

risk capital: equity capital for which there is no guarantee that

stockholders will ever recoup their investment or earn a decent
return.
Shareholder value: returns that shareholders are from purchasing
shares and a company.
Competitive advantage: they achieved advantage over rivals when a
companys profitability is greater than the average profitability of
firms in its industry.
Sustained competitive advantage: a company strategies enable it to
maintain above average profitability for a number of years.
Business model. The conception of how a strategy should work
together as a whole to enable the company to achieve competitive
advantage
General managers: managers who bear responsibility for the overall
performance of the company or for one of its major self contained
subunits were divisions.
Functional managers: managers responsible for supervising a
particular function, that is, a task, act, David. He or operations
touches accounting, marketing, research and development,
information technology, or logistics.
Multidivisional company: a company that competes in several
different businesses and has created a separate self-contained
division to manage each.
Business unit: a self-contained division that provides a product or
service for a particular market.
A MODEL OF THE STRATEGIC PLANNING PROCESS.
1. The corporate mission and major corporate goals.

2. Analyze organizations external competitive environment to

identify opportunities and threat.
3. Analyze the organizations internal operating environment to
identify the organizations strengths and weaknesses.
4. Select strategies that build on the organizations strengths and
correct its weaknesses in order to take advantage of external
opportunities and counter external threat. The strategy should be
consistent with the mission and major goals of the organized
station. They should be congruent and constitute a viable business
model.
5. Implement the strategies
Mission statement: the purpose of the company or a statement of
what the company strives to do.
Customer oriented: focus on what the customer needs and how the
customers needs are being satisfied.
Product oriented: focuses on the characteristics of the products sold
and the market served, not all which kinds of customer needs the
products are satisfying.
Vision statement: is the articulation of a companys desired
achievement or future state. (Managers and employees conducting
themselves, how they should do business, and what kind of
organization should a build to achieve its mission)
Values: a statement of how employee should conduct selves and
their business to help achieve the companys mission.
A goal is a precise and measurable desired future state that a
company attempts to realize. Well-constructed goals have 4 main
characteristics.
1. They are precise and measurable.
2. They address crucial issues. To maintain focus. Managers
should a limited number of major goals to his best the
performance of the company. The goals are then selected,
which are decided are crucial or important ones.
3. They are challenging, but realistic. They give all employees
and 10 tips to look for ways of improving the operations of an
organization.
4. They specify a time. In which the goal should be achieve, when
that is appropriate. Time constraints, tell employees that
success requires a goal to be at St. via give-and-take, not after
that date. Deadlines create and urgency towards goal
attainment and act as a motivator.
Short run and long-run decision-making

Long-term goals are related to such issues as product development,

customer satisfaction and efficiency, and they emphasize specific of
actives or targets concerning such details as employee and capital
productivity, product quality, innovation, customer satisfaction and
customer service.
External analysis and internal analysis, swot analysis
division of strategies can be divided into 4 main categories:
functional level strategies which are direct did at improving the
effect illness of operations.
Business level strategies, which encompasses the business overall
competitive team.
Global strategies which address how to expand operations outside
the home country.
Corporate level strategies: which answer the primary questions
whether business or business issue, we began to maximize the longrun profitability and profit growth of the organization and how
should we enter an increase our presence in these businesses to
gain a competitive advantage?
Industry Value Chain
Support Activities
Company infrastructure
Info Systems
resources

Materials Mgmt

R&D
Service

marketing and Sales

Production

Primary Activities

Income Statement

Human
Customer

Net Sales
Cost of Goods Sold
--------------------Gross Margin
Operating Expenses:
--R&D
--Selling, general and admin
--------------Total Operating Expenses
Operating Income
Other income and expenses
Income before provision for income taxes
Net Income
Earnings per common share:
--Basic
--Diluted
Shares used in computing earnings per share:
--Basic
--Diluted