The strategic management process
The three key strategic managements processes:
o Strategy analysis
o Strategy formulation
o Strategy implementation.
Starts with a Deliberate Strategy:
o Intended Strategy
Finalizing the System and Project Scope
System scope: defines capabilities of new system
Project scope: describes how project is to be built
Provides disposition toward staff training
Provides data conversion information
Sets parameters for quality contro
Narrative memos, reports, or lists
Provide high-level views
Information not reflected in mathematical models
Usually incorporated into graphical schemes
Graphical models provide instant information
Supplement abstract l
Learning from others mistakes
Sears former CEO said: todays peacocks are tomorrows feather duster
Nokia: 1990s: the worlds largest mobile manufacturing. Their competitive advantage
disappeared in 2007 shortly after the iPhone was introduced.
Unified Process (UP) development methodology
Consists of phases, iterations, and disciplines
Provides framework for project definition and execution
Project management: critical support discipline
Project Management prominent in inception
What is strategic management?
The analyses, decisions, and actions an organization undertakes in order to create and
sustain competitive advantages.
o Part one:
Analysis: goals analyzing companys vision, mission, resources etc.
internal and external envir
Determining the Schedule Feasibility
Development of project schedule involves high risk
Assumptions and estimates made without adequate information
Adaptive projects very susceptible to schedule risks
Project managers use milestones to evaluate pace and c
Identify Project Risks and Confirm Project Feasibility
Feasibility analysis: verifies project viability
Activities used to evaluate a projects feasibility
Assess the risk to the project (risk management)
o Determine the organizational/cultural feasibility
Models and Modeling
Models are great communicators
Leverage visual cues to convey information
Reduce complexity of components to essentials
Models are configured within a hierarchy
Model granularity can be adjusted by analyst
UML activity diagram is one t
Techniques for Information Gathering
Building effective prototypes
o Quickly composed (especially using CASE tools)
Distribute and Collect Questionnaires
Conduct Joint Application Design Sessions (JAD)
o Includes JAD Session Leader,
Analyzing the administrative cost of diversification:
Negotiation costs with suppliers and distributers
Firms can use economies of scope and r
Economic of scope and revenue enhancement
Leveraging core competencies:
o Firms can use economies of scope and revenue enhancement by sharing their
experience, the way they do things, skills, expertise and strategies with each other.
This should be done i
Business Level Strategy
Firms want to have more than average return, so they need a better way to compete. Why do
some firms make more profit than others?
In this chapter we study the following:
Types of competitive advantage and sustainability
Product Life Cycle
Maturity stage: the stage that the demand for the product begin to slow down and marginal
competitors exit the market. Competition increases (even though we have less competitors?
Best strategy for this stage: is to do:
Corporate strategy involves:
What business should we compete in?
How can we compete in that business?
Creating value by:
Diversifications: Intel & Microsoft, Exxon and Mobil
Mergers (how about Mercedes Bens and Chrysler?)
o Making the d
Implementing Low Cost Strategy
Some keys to implement the low cost strategy are the following:
Experience curve: from BCG group in 1968
Product change time: example :of NASCAR
Marginal customers: avoid them (why?) but must pick up the demand by others
The Focus Strategy
o Focus is a strategy that focuses on a narrow market or narrow product or both.
o It can be achieved by low cost leadership or differentiation or a combination of
o It requires companies to h
The Differentiation Strategy
This strategy is achieved by creating a different product or services than other firms.
o A product/service that is perceived different and worthy to customers.
Usually firms achieve this differentiat
The Internet Affecting Strategies
How does internet affect the 3 competitive strategies?
o Overall cost leadership:
o Advantage: internet makes it easy to cut cost
o Disadvantage: internet causes the strategy to be easily imitated
Recognizing the Firms Intellectual Capital
Managers must recognize the human capital because the companys value is not just
related to the physical assets.
Example: Vincent Van Gogh and Pablo Picasso
1.Van Goghs primary connection was through his brother