Strategik Manajemen-UUM Sesi I

7/29/2019 Strategik Manajemen-UUM Sesi I

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The Nature of

Strategic Management

Ch 1 -1FD


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Art & science offormulating,

implementing, andevaluating,cross-functional decisions that enablean organization to achieve its

objectives

Strategic Management Defined

2FD


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Strategic Management: a set of managerial decisionsand actions that determines the long-run performance ofa corporation.

Includes:

Internal and external environment scanning

Strategy formulation Strategy implementation

Evaluation and control

WH

1-3

The Study of Strategic Management


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Purpose of Strategic Management

To exploit and create new and different opportunitiesfor tomorrow,long range planning.

4FD


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In essence, the strategic planis a companys game

plan

5FD


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Benefits of Strategic Management:

Clearer sense of strategic vision for the firm

Sharper focus on what is strategically

important Improved understanding of a rapidly

changing environment

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Improved organizationalperformance

Achieves a match

between theorganizationsenvironment and itsstrategy, structure andprocesses

Important in unstableenvironments

Strategic thinking

Organizational learning

Additional Benefits of Strategic Management:

7TS


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Phases of Strategic Management:

Phase 1: Basic financial planning

Phase 2: Forecast-based planning

Phase 3: Externally oriented strategic planning

Phase 4: Strategic management

1-8TS


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What Do We Mean By Strategy?

Consists ofcompetitive movesandbusinessapproachesused by managers to run thecompany

Managementsaction planto

Grow the business

Attract and please customers

Compete successfully

Conduct operations

Achieve the targeted levels oforganizational performance

9FD


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The Hows That Define a Firm's Strategy

Howto grow the business Howto please customers

Howto outcompete rivals

Howto manage each functionalpiece of the business (R&D, production, marketing,HR, finance, and so on)

Howto respond to changing market conditions

Howto achieve targeted levels of performance

Strategyis HOWto . . .

10FD


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Choosing the Hows of Strategy

Strategic choices about how are based on

Trial-and-error organizational learning about what has worked andwhat has not worked

Managements appetite for taking risks Managerial analysis and strategic thinking about how best to

proceed, given market conditions and a companys circumstances

In choosing a strategy, management is in effect saying,

Among all the many different ways of competing we could havechosen, we have decided to employ this combination of competitiveand operating approaches to move the company in the intendeddirection, strengthen its market position and competitiveness, andboost performance.

11FD


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Key Elements of a Successful Strategy

Developing a successful strategyhingesonmakingcompetitive movesaimed at

Appealing to buyers in ways to set the companyapart from rivals and

Carving out its own market position Involvesdevelopingadistinctive ahaelement

to

Attract customers and

Produce a competitive edge

Copying competitive moves of othersuccessful companies rarely works!

12FD


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Starbucks Strategy:The Key Elements

Expand number of Starbucks stores domestically by

blanketing metropolitan areas, then adding stores on thecitys perimeter

Make Starbucks a global brand by opening stores in anincreasing number of foreign locations

View each store as a billboard for the company and as acontributor to building the companys brand and image

Broaden in-store products to include coffee-flavored icecream, teas, fresh pastries, music CDs, and coffeeaccessories

Fully exploit the growing power of the Starbucks name andbrand image with out-of-store sales

Display corporate responsibility andenvironmental sustainability

Control costs of opening new stores

Promote customer-friendly service and enhance storeambience by making Starbucks a great place to work

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3 Stages of the Strategic Management Process

Strategy formulation

Strategy implementation

Strategy evaluation

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Vision&Mission

StrategyFormulation

ExternalOpportunities&Threats

InternalStrengths&Weaknesses

Long-TermObjectives

AlternativeStrategies

StrategySelection

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Issues in StrategyFormulation

Businesses to enterBusinesses to abandonAllocation of resourcesExpansion or

diversificationInternational marketsMergers or joint

venturesAvoidance of hostiletakeover

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StrategyImplementation

Annual Objectives

Policies

Employee Motivation

Resource Allocation

17

FD


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Strategy Implementation Steps Developing a strategy-supportive culture

Creating an effective organizational structure

Redirecting marketing efforts

Preparing budgets Developing and utilizing information systems

Linking employee compensation to organizationalperformance

18FD


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Issues in StrategyImplementation

Action Stage of StrategicManagement

Mobilization of

employees & managers

Most difficult stage

Interpersonal skills

critical

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Strategy Evaluation

Internal Review

External Review

Performance Measurement

Corrective Action

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Peter Drucker: Think through the

overall mission of a business. Ask thekey question:

What is our Business?

Prime Task of


21FD


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The strategic management process attempts toorganize quantitative and qualitative informationunder conditions of uncertainty

Integrating Intuition & Analysis

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Intuition is based on:

Past experiences

Judgment

Feelings


Intuition isuseful for decision making inconditions of: Great uncertainty Little precedent Highly interrelated variables Several plausible alternatives

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Involve management at all levels

Intuition & Judgment

Influenceallanalyses


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Organizations should continually

monitor internal and externalevents and trends so that timelychanges can be made as needed

Adapting to Change

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Key Terms in Strategic Management

Competitive advantage

Strategists

Vision and mission statements

External opportunities and threats

Internal strengths and weaknesses

Long-term objectives

StrategiesAnnual objectives

Policies

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Anything that a firm does especiallywell compared to rival firms

Strategic Management is

Gaining and MaintainingCompetitive Advantage

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1. Continually adapting to changes in externaltrends and events and internal capabilities,competencies, and resources

Achieving Sustained Competitive

Advantage

2. Effectively formulating, implementing, andevaluating strategies that capitalize on thosefactors

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Strategists

Gather Information

Analyze Information

Organize Information

29FD


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Vision Statement

What do we want to become?

Mission Statement

What is our business?

Vision and Mission Statements

1-30FD


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External Opportunities and Threats

Analysis of Trends Economic

Social

Cultural Demographic/Environmental

Political, Legal, Governmental

Technological Competitors

1-31FD


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Basic Tenet of Strategic Management

External Opportunities and Threats

Strategy Formulation

Take advantage ofExternal Opportunities

Avoid/minimize impact ofExternal Threats

1-32FD


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Controllable activities performed

especially well or poorly

Determined relative to competitors

Internal Strengths and Weaknesses

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Typically located in functional areas of the firm

Management

Marketing

Finance/Accounting

Production/Operations

Research & Development

Management Information Systems


FD


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Assessing the Internal Environment


Internal Factors

Performance Measures

Ratios

Industry Averages

Survey Data

1-35FD


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Specific results that an organizationseeks to achieve in pursuing its basic

mission

Long-term means more than one year

Long-Term Objectives

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Long-Term Objectives

Essential for ensuring the firms success

Provide direction

Aid in evaluation

Create synergy

Reveal priorities

Focus coordination

Provide basis for planning, organizing,motivating, and controlling

1-37FD


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Means by which long-term objectives

are achieved

Strategies

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Strategies

Examples Geographic expansion

Diversification

Acquisition

Product development Market penetration

Retrenchment

Divestiture

Liquidation

Joint venture

1-39FD


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Sample Strategies

Table 1-1

Best Buy

Levi Strauss

New York Times Company

1-40FD


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Short-term milestones that firms mustachieve to reach long-term objectives

Annual Objectives

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Means by which annual objectives willbe achieved

Policies

1-42HD


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Strategy and the Quest for

Competitive Advantage The heart and soulof any strategy are actions a

company makes to

Improve its financial performance,

Strengthen its competitive position, and

Gain a competitive advantage over rivals Acreative, distinctive strategy that sets a company

apart from rivals and yields a competitive advantage isa companys most reliable ticket to above average

profitability Operating with a competitive advantage is more profitable

than operating without one

Operating with a competitive disadvantage nearly alwaysresults in below-average profitability

43TS

f l d


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A Powerful Strategy Leads to

Sustainable Competitive Advantage A company achieves sustainable competitive

advantage when An attractive number of buyers prefer its

products/services over those of rivals and The basis for this preference is durable

Its nice when a strategy produces A temporary competitive edge but A sustainable edge over rivals greatly enhances a

companys prospects for above-average profitability

What separates a pow erfu l s trategyfrom an ordinary

strategy is managements ability to forge a series of

moves, both in the marketplace and internally, that

produces sus tainable compet i tive advantage!

44TS

Strategic Approaches to Building


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Strategic Approaches to Building

Sustainable Competitive Advantage

Be the industrys low-cost provider

Achieve a cost-based competitive advantage

Incorporate differentiating features

Superior product/service keyed to higher quality,better performance, wider selection, value-addedservices, or some other attribute

Focus on a narrow market niche

Win a competitive edge by doing abetter job than rivals of serving theneeds and preferences of buyers in the niche

Develop expertise and resource strengthsnot easily imitated or matched by rivals

Achieve a capabilities-based competitive advantage45

TS


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Competitive Advantage

Examples Strive to be industrys low-cost provider

Wal-Mart

Southwest Airlines

Outcompete rivals on a key differentiating feature

Johnson & Johnson Reliability in baby products

Harley-Davidson King-of-the-road styling

Rolex Top-of-the-line prestige

BMW Engineering design and performance

Amazon.com Wide selection and convenience

46TS
http://www.amazon.com/http://www.amazon.com/


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Competitive Advantage Examples(cont)

Focus on a narrow market niche

eBay Online auctions

Best Buy Home electronics

McAfee Virus protection

Starbucks Premium coffees and coffee drinks

The Weather Channel Info about the weather

Develop expertise, resource strengths, andcapabilities not easily imitated by rivals

Walt Disney Theme park management and familyentertainment

Dell Computer Build-to-order manufacturing capabilities

Ritz-Carlton Personalized customer service47

TS

Figure 1 1: Identifying a Companys Strategy


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Figure 1.1: Identifying a Company s Strategy

48TS

A Companys Strategy Is a Blend of

d d


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Proactive Initiatives and Reactive Adjustments

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Li ki St t With Ethi


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Linking Strategy With Ethics

Ethical and moral standards go beyond Prohibitions of law and language of thou shalt

not

to issues of Duty and right vs. wrong

Ethical and moral standards addressWhat is the right thing to do?

Two criteria of an ethical strategy Does not entail actions and behaviors that cross the line

from should do to should not do (because such actionsare unsavory, shady, unconscionable, injurious to others,or harmful to the environment)

Allows management to fulfill its ethical duties to allstakeholders

50TS

A Firms Ethical Responsibilities


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p

to Its Stakeholders

Owners/shareholders Rightfully expect some form ofreturn on their investment

Employees Rightfully expect to be treated with dignityand respect for devoting their energies to the enterprise

Customers Rightfully expect a seller to provide themwith a reliable, safe product or service

Suppl iers Rightfully expect to have an equitablerelationship with firms they supply and be treated fairly

Communi ty Rightfully expect businesses to be goodcitizens in their community

51TS

Role of Senior Executives:


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Role of Senior Executives:

Linking Strategy with Ethics

Forbid pursuit of ethically questionable businessopportunities

Insist all aspects of company strategyreflect high ethical standards

Make it clear that all employees areexpected to act with integrity

Install organizational checks and balances to

Monitor behavior

Enforce ethical codes of conduct Provide guidance to employees in gray areas

Display genuine commitment to conduct businessactivities ethically

52TS

Relationship Between


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Relationship BetweenStrategy and Business Model

Strategy . . .Deals with a companys

competitive initiatives andbusiness approaches

Business Model . . .Concerns whether revenuesand costs flowing from the

strategy demonstrate abusiness can be profitable and

viable

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54FD


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Strategic Management Process

Dynamic & continuousMore formal in largerorganizations

Strategic Management Model

1-55FD


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Communication is a key tosuccessful strategic management

56FD


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Benefits of Strategic Management

Ch 1 -57FD


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Benefits of Strategic Management Nonfinancial Benefits

Enhanced awareness of threats

Improved understanding of competitors strategies

Increased employee productivity Reduced resistance to change

Clearer understanding of performance-rewardrelationship

Enhanced problem-prevention capabilities

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Why Some Firms Do No Strategic

Planning Lack of knowledge of strategic planning

Poor reward structures

Fire fighting

Waste of time Too expensive

Laziness

Content with success

59FD

h


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Why Some Firms Do No Strategic

Planning (continued)

Fear of failure

Overconfidence

Prior bad experience

Self-interest

Fear of the unknown

Honest difference of opinion

Suspicion

60FD


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Pitfalls in Strategic PlanningStrategic planning is an involved, intricate,

and complex process that takes anorganization into uncharted territory

61FD


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Effective Strategic Planning is:

A people process more than a paper process

A learning process

Words supported by numbers

Simple and nonroutine

Varying assignments, team membership, meetingformats, and planning calendars

Challenging assumptions underlying corporatestrategy

62FD


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Effective Strategic Planning continued

Welcomes bad news

Requires open-mindedness and a spirit of inquiry

Is not a bureaucratic mechanism

Is not ritualistic or stilted

Is not too formal, predictable, or rigid

Does not contain jargon or arcane language

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Effective Strategic Planning continued

Is not a formal system for control

Does not disregard qualitative information

Is not controlled by technicians Does not pursue too many strategies at once

Continually strengthens the good ethics isgood business policy

64FD


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Comparing Business and Military Strategy

Strategic planning started in the military

Similarity

Both business and military organizations mustadapt to change and constantly improve

Difference

Business strategy assumes competition Military strategy assumes conflict

Strategik Manajemen-UUM Sesi I

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