Chapter 1 - The Strategic management process

Chapter 1 - The Strategic management process - I ntr...

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Unformatted text preview: I ntr oduction to Str ategic Management What is strategy NOT???? Strategy isn’t… • Mintzberg - • Planning • Analysis and calculation • Prediction • Detachment • For malization • Por ter – • Operational Effectiveness • I mitation • Competitive Convergence So then what Strat egy? Strategy is… • The creation of a unique and valuable positioning involving a different set of activities. • Making trade-offs in competing • Creating fit among a company’s activities. What are the 3 kinds of strat egic positioning? • Var iety-based positioning • Needs-based positioning • Access-based positioning What is straddling? What is meant by fit? • First-order fit – simple consistency between activities (functions) • Second-order fit – activities that are reinforcing • Third-order fit – customization of effor t What is the growth trap? What is the role of leadership? • General management is more than the stewardship of individual functions. I ts core is strategy: defining and communicating the company’s unique position, making trade-offs, and forging fit among activities. Who are some great strat egic leaders… what makes them great? 1- 11 Strategic Management • What is the main goal of strategic management? Strategic Management “Maximizing shareholder value is the ultimate goal of profit making companies…” Shareholder Value • What is shareholder value? • Shar eholder Value – The retur ns that shareholders ear n from purchasing shares in a company. • What dr ives shareholder value? Shareholder Value • Pr ofitability (ROI C): (net profit)/(invested capital + debt) • Measures how efficiently companies are utilizing their invested capital • Pr ofit Gr owth – The increase in net profit (net income – taxes) Deter minants of Shareholder Value To increase shareholder value, managers must To increase shareholder value, managers must pursue strategies that increase the profitability of the pursue strategies that increase the profitability of the company company and and grow the profits. grow the profits. Strategic Management • How do fir ms achieve sustainable profit growth? Competitive Advantage • Fir ms must achieve a sustainable competitive advantage, which results when a company’s strategies lead to super ior per for mance compared to competitors over time. • Examples of companies with a sustainable competitive advantage? Levels of Strat egic Management • What are the differences between cor por ate level managers, business level managers, and functional managers? Strategic Managers • Cor porate-Level Managers • Oversee development of strategies for whole organization...
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This note was uploaded on 06/07/2011 for the course BMGT 892 taught by Professor Donsmith during the Spring '11 term at UNL.

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Chapter 1 - The Strategic management process - I ntr...

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