Business managemnt2
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Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Strategic Business
Management
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What is the meaning of Strategic Business Management?
The activities associated with running a company, such as controlling, leading, monitoring, organizing, and planning
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Planning LeadingOrganizing Controlling
Management Functions
Management Functions
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A process that includes defining goals,
establishing strategy & developing plans to coordinate activities
Planning
Planning
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Determining what tasks are to be done, who is to do
them, how the tasks are to be grouped, who reports to whom & where decisions
are to be made
Organizing
Organizing
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A function that includes motivating employees,
directing others, selecting the most effective communication
channels, and resolving conflicts
Leading
Leading
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Monitoring activities to ensure they are being
accomplished as planned & correcting any significant
deviations
Controlling
Controlling
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Efficient versus Effective Management
Traditional ManagementDecision making, planning, & controlling
CommunicationExchanging routine information & processing
paperwork
Human Recourses ManagementMotivating, disciplining, managing conflict, Staffing, &
training
NetworkingSocializing, politicking, & interacting with others
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FutureShort /
Long Term planning
Strategy
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Strategy & Objectives
S
M
A
R
T
Specific
Measurable
Achievable
Realistic
Time bounded
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Strategic Challenges
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Business Mission and Its Vision
An aspirational description of what an organization would like to achieve or accomplish in the mid-term
or long-term future
A written declaration of an organization's core purpose and focus that normally remains unchanged
over time.
Vision
Mission
A mission is different from a vision in that the former is the cause and the latter is the effect; a mission is something to be accomplished
whereas a vision is something to be pursued for that accomplishment
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A SWOT Chart
SWOT AnalysisThe use of a SWOT chart to compile and organize the
process of identifying company
Strengths,Weaknesses,
Opportunities, and Threats.
P.S lately they call it SLOT as L stands for Limitations
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Organization’s Strategy
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Types of Strategic Planning
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Types of Strategic Planning
Diversification strategy
The firm will expand by adding new product lines.
Vertical integration strategy
means the firm expands by producing its own raw materials, or selling its product direct.
Consolidation strategy
reduces the company’s size.
Geographic expansion strategy
takes the company abroad.
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Cost leadership:
A firm aims to become the low-cost leader .
Differentiation:
A firm seeks to be unique in its industry.
Focus:
A firm seeks to compete by providing a product or service customers can get in no other way.
Functional strategiesIdentify the basic courses of action that each department will
pursue in order to help the business attain its competitive goals.
Types of Strategic Planning
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Competitive Advantage
Any factors that allow an organization to differentiate its product or service from
those of its competitors to increase market share
Competitive advantage
Ex. Mc Donald’s competitive advantage, consist of two key
elements: Production & delivery speed; while Microsoft’s competitive
advantage is making user friendly software
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Strategic Business Management
Business target market
Business mission statement
Business customer
Business strategy for competitionBusiness objectives and performance
6 Policies & procedures
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Potential opportunities for increased sales & profits
Foresee future
Assessment of your competitors
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1. Business mission statement without a guiding mission statement, a business is bound to fail.
2. Business target market
a business should have a written description of the firm’s target market , knowing where the product or service is produced?
2. Business customer
you should answer the following questions: - what customers characteristics are? - what are they purchasing? - what they buy from you?
Strategic Business Management
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4. Business strategy for competition Do you have a master strategy designed to keep your firm
ahead of the competition? Every firm should define its competitive advantage & then
seek to maintain it through planning.
5. Business objectives and performance Do you have written objectives to guide your company’s
performance in critical areas? Are they specific and measurable? Do they include a time frame and an index for measuring
progress?
6. policies & procedures Have you created written policies to guide action and decision
making in the organization and to ensure consistency? Do employees know what these policies are? Are thy followed?
Strategic Business Management
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7. Potential opportunities for increased sales Have you identified potential opportunities for increased
sales and profits for your firm?
New products, new markets, or new locations could generate more business for the small firm if management has the capacity to reach them ?
8. Foresee future Do you attempt to foresee future conditions and changes
that have a significant impact on your business?
Do you predict future economic trends and their affection your business?
Although no forecast is ever completely accurate, managers should attempt to peer into the future to avoid being surprised by unforeseen changes.
Strategic Business Management
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9. Assessment of your competitors
Do you make assessment of your competitors’ actions so that you can plot a strategy to meet them?
How do customers perceive your firm in comparison to your competitors?
Strategic Business Management
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Strategic Management Process
Strategic management tasks Step 1: Define the Business and Its Mission
Step 2: Perform External and Internal Audits
Step 3: Translate the Mission into Strategic Goals
Step 4: Formulate a Strategy to Achieve theStrategic Goals
Step 5: Implement the Strategy
Step 6: Evaluate Performance
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Step 1: get the big picture
Understand your business strategy
Highlight the key driving forces of your business?
e.g., technology, distribution, competition.
what are the fundamental people contribution to bottom business performance?
Step 2: develop a mission statement Develop the mission statement that relates to the people side of the
business.
Strategic Management Process
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Step 3: conduct a SWAT analysis of the organization
focus on the internal strengths and weaknesses of
people side of the business
Consider the current skill and capability issue
Highlight the opportunities & threats relating to the
people side of the business
Consider skill shortages
The impact of new technology on staffing levels
Strategic Management Process
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Step 4 : conduct a detailed HR analysis
Concentrate on the organization’s COPS (culture, organization, people, and HR systems)
Consider where you are now & where do you want to be?
What gaps exists between the reality of where you are now and where you want to be?
Step5: determine critical people issues Go back to your business strategy and examine it against your
SOWT and COPS analysis.
Identify where you should be focusing your efforts and resources.
Strategic Management Process