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Strategic Management:
Concepts & Cases
14th Edition
Fred David
Ch 1 -1
Ch 1 -2
Strategic Management
Defined
Ch 1 -3
Strategic Management
Ch 1 -4
Strategic management
achieves a firms success
through integration
Management
Marketing
Finance/Accounting
Production/Operations
MIS
Ch 1 -5
Strategy Formulation
Vision & Mission
External Opportunities & Threats
Internal Strengths & Weaknesses
Long-Term Objectives
Alternative Strategies
Strategy Selection
Ch 1 -6
Issues in Strategy
Formulation
New business
opportunities
Businesses to abandon
Allocation of resources
Expansion or
diversification
International markets
Mergers or joint ventures
Avoidance of hostile
takeover
Ch 1 -7
Strategy Implementation
Annual Objectives
Policies
Employee Motivation
Resource Allocation
Ch 1 -8
Strategy
Implementation
Action Stage of Strategic
Management
Most difficult stage
Mobilization of
employees & managers
Interpersonal skills
critical
Consensus on goal
pursuit
Ch 1 -9
Strategy Evaluation
Internal Review
External Review
Performance Metrics
Corrective Actions
Ch 1 -10
Strategy
Evaluation
Final Stage of Strategic
Management
Subject to future
modification
Todays success no
guarantee of future success
New & different problems
Complacency leads to
demise
Ch 1 -11
Prime Task of
Strategic Management
Ch 1 -12
Ch 1 -13
Ch 1 -14
Ch 1 -15
Intuitive Thinking
Ch 1 -16
Adapting to Change
Ch 1 -17
Strategic Management is
Gaining and Maintaining
Competitive Advantage
Ch 1 -18
Achieving Sustained
Competitive Advantage
1. Adapting to change in external trends,
internal capabilities, and resources
Ch 1 -19
Adapting to Change
Rate & magnitude of change
increasing dramatically
E-commerce
Demographics
Technology
Copyright 2009 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 1 -20
Adapting to Change
Effective Adaptation
Ch 1 -21
Ch 1 -22
Key Terms
Strategists Firms success/failure
Various Job Titles:
Ch 1 -23
Key Terms
Vision Statement
What do we want to become?
Mission Statement
What is our business?
Ch 1 -24
Key Terms
Ch 1 -25
Key Terms
Opportunities & Threats (External)
Analysis of Trends:
Economic
Social
Cultural
Demographic/Environmental
Technological
Competitors
Ch 1 -26
Key Terms
Opportunities & Threats
Environmental Scanning (Industry Analysis)
Ch 1 -27
Key Terms
Opportunities & Threats
Basic Tenet of Strategic Management
Take advantage of
External Opportunities
Strategy Formulation
Avoid/minimize impact of
External Threats
Ch 1 -28
Key Terms
Ch 1 -29
Key Terms
Strengths & Weaknesses (Internal)
Typically located in functional areas of the firm
Management
Marketing
Finance/Accounting
Production/Operations
Ch 1 -30
Key Terms
Strengths & Weaknesses
Assessing the Internal Environment
Financial Ratios
Performance Metrics
Internal Factors
Industry Averages
Survey Data
Ch 1 -31
Key Terms
Long-term Objectives
Ch 1 -32
Key Terms
Long-term Objectives
Essential for ensuring the firms success
Provide direction
Aid in evaluation
Create synergy
Focus coordination
Ch 1 -33
Key Terms
Strategies
Ch 1 -34
Key Terms
Strategies
Some Examples
Geographic expansion
Diversification
Acquisition
Market penetration
Retrenchment
Liquidation
Joint venture
Ch 1 -35
Key Terms
Annual Objectives
Ch 1 -36
Key Terms
Policies
Ch 1 -37
Chapter 3
Vision
&
Mission
Chapter 2
Long-Term
Objectives
Generate,
Evaluate,
Select
Strategies
Implement
Strategies:
Mgmt Issues
Implement
Strategies:
Marketing,
Fin/Acct,
R&D, CIS
Measure &
Evaluate
Performance
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Internal
Audit
Chapter 4
Ch 1 -38
Ch 1 -39
Identify Existing
Vision
Mission
Objectives
Strategies
Ch 1 -40
Ch 1 -41
Benefits of Strategic
Management
Proactive in shaping firms future
Initiate and influence firms activities
Ch 1 -42
Benefits of Strategic
Management
Financial Benefits
Improvement in sales
Improvement in profitability
Productivity improvement
Ch 1 -43
Benefits of Strategic
Management
Nonfinancial Benefits
Improved understanding of competitors strategies
Ch 1 -44
Benefits of Strategic
Management (Greenley)
1. Identification of opportunities
2. Objective view of management problems
3. Improved coordination & control
4. Minimizes adverse conditions & changes
5. Decisions that better support objectives
Ch 1 -45
Benefits of Strategic
Management (Greenley contd)
6. Effective allocation of time & resources
7. Internal communication among personnel
8. Integration of individual behaviors
9. Clarify individual responsibilities
10. Encourage forward thinking
Ch 1 -46
Benefits of Strategic
Management (Greenley contd)
Ch 1 -47
Ch 1 -48
Suspicion
Copyright 2009 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 1 -49
Ch 1 -50
Ch 1 -51
Ch 1 -52
Misleading advertising
Misleading labeling
Harm to the environment
Insider trading
Dumping flawed products on foreign markets
Poor product or service safety
Padding expense accounts
Ch 1 -53
Environmental Management
Systems (EMS)
Ch 1 -54
Parent company
Host country
Ch 1 -55
Cultural differences
Norms
Values
Work ethic
Ch 1 -56
Advantages of International
Operations
Absorb excess capacity
Reduce unit costs
Ch 1 -57
Advantages of International
Operations (contd)
Ch 1 -58
Disadvantages of International
Operations
Difficult communications
Underestimate foreign competition
Cultural barriers to effective management
Complications arising from currency
differences
Copyright 2009 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 1 -59