Presented by: Erika S. Nicolas, MBA

Derived from the Greek word strategos which means “the general’s view” (the CEO’s view). In business context, the idea of strategy, therefore, suggests a big perspective on the firm and its context.

It is a comprehensive master plan that states how the corporation will achieve its mission and objectives

Policy is a broad guideline for decision making that links the formulation of strategy with its implementation whereas a strategy is a comprehensive plan that states how a corporation will achieve its mission.

Policies are the means by which annual objectives will be achieved whereas strategies are the means by which long term objectives will be achieved.

Policies are guides to decision making and address repetitive/recurring situations whereas strategies are potential actions that require top management decisions and large amount of the firm’s resources.

Policies include guidelines, rules & procedures established to achieved stated objectives whereas strategies (business) include, geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation and joint venture.

It is defined as the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives.

It is synonymous with the term “strategic planning” which is commonly use in the business world.

The Evolution of Strategic ManagementThe Evolution of Strategic Management

DOMINANTTHEME

MAINISSUES

CONCEPTS&

TECHNIQUES

IMPLEMENT-ATION

1950s 1960s Early-mid Late1970s Late 1980s Late 1990s1970s early 1980s early 1990s early 2000s

Budgetary Corporate Corporate Analysis of Quest for Strategicplanning & planning strategy industry & competitive innovationcontrol competition advantage The “New

Economy”Financial control Planning growth Diversifica- Positioning Competitive Innovation &

ion advantage knowledge

Budgeting Forecasting & Portfolio Analysis of Resource Dynamic project appraisal investment planning. industry & analysis. sources of

planning Synergy competition Case advantagemarket competences Knowledgeshare management

cooperation

Emphasis on Rise of Diversifi- Industry/market Restructuring Virtual orga-financial corporate planning cation. selectivity. BPR. nization.management departments Quest for Active asset Refocusing Alliances

& formal global management Outsourcing Quest forplanning market share critical mass

The Evolution of Strategic ManagementThe Evolution of Strategic Management

DOMINANTTHEME

MAINISSUES

CONCEPTS&

TECHNIQUES

IMPLEMENT-ATION

1950s 1960s Early-mid Late1970s Late 1980s Late 1990s1970s early 1980s early 1990s early 2000s

Budgetary Corporate Corporate Analysis of Quest for Strategicplanning & planning strategy industry & competitive innovationcontrol competition advantage The “New

Economy”Financial control Planning growth Diversifica- Positioning Competitive Innovation &

ion advantage knowledge

Budgeting Forecasting & Portfolio Analysis of Resource Dynamic project appraisal investment planning. industry & analysis. sources of

planning Synergy competition Case advantagemarket competences Knowledgeshare management

cooperation

Emphasis on Rise of Diversifi- Industry/market Restructuring Virtual orga-financial corporate planning cation. selectivity. BPR. nization.management departments Quest for Active asset Refocusing Alliances

& formal global management Outsourcing Quest forplanning market share critical mass

Four Basic Elements

6

Identify current mission and strategic goals

Conduct competitive analysis:•strengths•weakness•opportunity•threats

Develop specific strategies:•corporate•business•functional

carry out strategic plans

maintain strategic control

assess organisational factors

assess environmental factors

Strategy implementationStrategy formulation

The process of conducting research and gathering and assimilating external information.

It is also called “industry analysis”.

Vision & Mission Opportunities & Threats Strengths & Weaknesses Long Term Objectives Alternative Strategies Strategy Selection

(for reading)

Issues include:•What new businesses to enter•What businesses to abandon•How to allocate resources•Expand operations or diversify•Enter international markets•Merge or form joint venture•Avoidance of hostile takeover

Strategy Implementation

Programs

Budgets/Resource Allocation

Policies and Procedures

Action Stage of strategic management:•Most difficult stage •Mobilizing employees and managers

•Interpersonal skills are critical•Consensus on pursuing goals

Final stage of strategic management:

• All strategies subject to future modification

• Success today is no guarantee of success

tomorrow

• Success creates new and different problems

• Complacency leads to demise

Strategy Evaluation

Performance Measurement

External Review

Internal Review

Corrective Action

Allows company to be more proactive Allows company to initiate and influence

activities It promotes unity to the organization It helps the employees and managers

understand other’s view and what the organization is doing and why. Thus, commitment to the company becomes stronger.

(require more reading)

More profitable and successful Shows significant improvement in

sales, profitability and productivity. Exhibit long term financial

performance Good anticipation of short and long

term consequences.