Strategic ManagementEssay Preview: Strategic ManagementReport this essayChapter 1- Strategic management, creating competitive advantageStrategic management consists of the analysis, decisions and actions of an organisation in order to create and sustain competitive advantage.2 main elements of strategyi.ongoing process of analysis, decisions and actionsii.to study why some firms outperform others.Michael Porter argues that sustainable competitive advantage cannot be achieved through operational effectiveness alone.4 key attributes of strategic managementi.direction toward overall organisational goals and objectives – “organisational versus individual rationality”ii.management includes multiple stakeholders in decision makingiii.management requires incorporating both short term and long term perspectives – “creative tension”iv.management involves the recognition of trade offs between effectiveness and efficiency – “doing the right thing” versus “doing things right”.Henry Mintzberg- in his view, the business environment is far from predictable, thus limiting out ability for analysis. Further, decisions in an organisation are seldom based on optimal rationality alone, given the political processes that occur in all organisations.
Therefore, there are intended/ deliberate strategies, unrealised strategies and emergent strategies.2 alternative perspectives to stakeholder managementi.Zero-sum- looks upon various stakeholders as competing for attention an resources of the organisation. This perspective is rooted, in part, in the traditional conflict between workers and management.
ii.Symbiosis- organisations can achieve mutual benefits when recognising that stakeholders are dependentupon each other for their success and well-being.Intellectual capital- knowledge has become the direct source of competitive advantage for companies selling ideas and relationships as well as indirect sources of competitive advantage for all companies trying to differentiate themselves from rivals by how they create value for their customers.
Enhancing employee involvement in the strategic management process- develop and mobilise people and other assets in the organisations, leaders are needed throughout the organisation.
benefits of a good mission statementi.help channel employees behaviourii.challenges help motivateiii.help resolve conflict between departmentsiv.provide a yardstick for rewards and incentivesLecture notesA.P. Sloan- strategy is all about positioningA.D. Chandler- structure follows strategyI Ansoff- strategy as planningChapter 2- Analysing the external environment of the firmenvironmental monitoring- tracks the evolution of environmental trends, sequences of events or streams of activities.Competitive intelligence- helps firms define and understand their industry and identify rivals strengths and weaknesses.A danger of using these tools and others for forecasting is that managers may view uncertainty as black and white and ignore important grey areas. The problem is that underestimating uncertainties can lead to strategies that neither defend against threats nor take advantages of opportunities.
6 segments of the general environmentali.demographic* Could use PESTELii.socioculturaliii.political/ legaliv.technologicalv.economicvi.globalThe competitive environment- Porters five forces1.threat of new entrants- barriers to entry2.bargaining power of buyers- high if purchase sin large volumes or products substitutable3.bargaining power of suppliers- high if few suppliers and products not substitutable4.threat of substitutes5.intensity of rivalry among competitorsa few problems with the five forcesi.the five forces analysis implicitly assumes a zero sum game, determining how a firm can enhance its position relative to the forces.ii.Its a static analysis.In an industry analysis no two firms are totally different but no two are exactly the same. Classifying an industry into strategic groups involves judgement. It is useful as an analytical tool, but one must exercise caution in deciding what dimensions to use.
However, classifying is still useful.i.Strategic grouping helps identify barriers to mobility that protect a group from attacksii.it helps identify groups whose competitive position may be marginal or tenuousiii.it helps chart the future decisions of the firmiv.it helps in thinking through the implications of each industry trend.Lecture notesthe four perspectives on strategyi.classical model (planning model) – no reason why realised strategy should not closely mirror intended strategy.ii.The processional approach – Minztberg- strategy as a stream of decisions. It is continuous and iterative.iii.Evolutionary approach- focus should be on short term survival looking at cost control
, the business cycle, – how to get the most out of your new product, not how to grow it to profitability.iv.Expected outcomes- strategic and/or market forces. iv.Eagerness to improve strategiesi.strategic analysis- a discussion of how to move forward at a pace that ensures performance; how to create and deploy products that achieve performance
The following is an explanation of the way the theory of strategy works.
There are, without a doubt, many factors at play in determining when to start a strategy.
In the case of strategy, there are a number of factors that play a role.
First, there is always a period of time, in which it is possible to be more selective about which strategy to adopt. In this time period, the firm is often expected to adopt strategies, which it finds suitable to its target area and may act in its best interest as a market for the new product.
Secondly, the firm is often expected—in a way or another—to take care of its costs. This can be taken to account in evaluating the best strategy. Indeed, many of the factors associated with the investment banking and investment banking firms seem to be associated with a combination of high productivity, great efficiency, and capital accumulation. And of course, there are different expectations given various opportunities.
Finally, the number and location of firms—such as in the case of an investment banking firm or a private equity firm—involves many different processes, including:
The business cycle: Where the firm is most active and engaged.
The impact of cost reduction on performance, and a host of other variables, such as the type of research and development (ROA), the number of employees.
The impact of disruption to existing firms, and on the effectiveness of new firms.
The impact of changes to existing processes and the business cycle in a given type of firm, which is not a natural occurrence.
Strategy in a company: Its impact on its operations or on its ability to innovate in an industry that is already growing. As we have already seen, many firms make money by expanding their operations, but only if all the above factors are incorporated in the calculations of the strategy.
Management: When the firm is performing well, usually in a well-staffed, well-organized, successful way, it is in the best interests of its business to
, the business cycle, – how to get the most out of your new product, not how to grow it to profitability.iv.Expected outcomes- strategic and/or market forces. iv.Eagerness to improve strategiesi.strategic analysis- a discussion of how to move forward at a pace that ensures performance; how to create and deploy products that achieve performance
The following is an explanation of the way the theory of strategy works.
There are, without a doubt, many factors at play in determining when to start a strategy.
In the case of strategy, there are a number of factors that play a role.
First, there is always a period of time, in which it is possible to be more selective about which strategy to adopt. In this time period, the firm is often expected to adopt strategies, which it finds suitable to its target area and may act in its best interest as a market for the new product.
Secondly, the firm is often expected—in a way or another—to take care of its costs. This can be taken to account in evaluating the best strategy. Indeed, many of the factors associated with the investment banking and investment banking firms seem to be associated with a combination of high productivity, great efficiency, and capital accumulation. And of course, there are different expectations given various opportunities.
Finally, the number and location of firms—such as in the case of an investment banking firm or a private equity firm—involves many different processes, including:
The business cycle: Where the firm is most active and engaged.
The impact of cost reduction on performance, and a host of other variables, such as the type of research and development (ROA), the number of employees.
The impact of disruption to existing firms, and on the effectiveness of new firms.
The impact of changes to existing processes and the business cycle in a given type of firm, which is not a natural occurrence.
Strategy in a company: Its impact on its operations or on its ability to innovate in an industry that is already growing. As we have already seen, many firms make money by expanding their operations, but only if all the above factors are incorporated in the calculations of the strategy.
Management: When the firm is performing well, usually in a well-staffed, well-organized, successful way, it is in the best interests of its business to