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TRANSCRIPT
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Copyright 2011 Pearson Education, Inc.Publishing as Prentice Hall
Ch 1 -1
Chapter 1
The Nature of Strategic Management
Strategic Management:Concepts & Cases
13th Edition
Fred David
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Ch 1 -2
Art & science offormulating,
implementing, andevaluating,cross-functional decisions that
enable an organization to achieve its
objectives
Strategic ManagementDefined
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Ch 1 -3
Strategic Management
In essence, the strategic plan is acompanys game plan
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Ch 1 -4
3 Stages of the Strategic
Management Process
Strategy formulation
Strategy implementation
Strategy evaluation
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Ch 1 -5
Vision&Mission
StrategyFormulation
ExternalOpportunities&Threats
InternalStrengths&Weaknesses
Long-TermObjectives
AlternativeStrategies
StrategySelection
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Ch 1 -6
StrategyImplementation
Annual Objectives
Policies
Employee Motivation
Resource Allocation
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Ch 1 -7
Strategy Evaluation
Internal Review
External Review
Performance Measurement
Corrective Action
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Ch 1 -8
Key Terms in Strategic Management
Competitive advantage
Strategists
Vision and mission statements
External opportunities and threats
Internal strengths and weaknesses
Long-term objectives
Strategies Annual objectives
Policies
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Ch 1 -9
Anything that a firm does especially
well compared to rival firms
Strategic Management isGaining and Maintaining
Competitive Advantage
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Ch 1 -10
Strategists
Gather Information
Analyze Information
Organize Information
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Ch 1 -11
Vision StatementWhat do we want to become?
Mission Statement
What is our business?
Vision and Mission Statements
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Ch 1 -12
External Opportunities and Threats
Analysis of Trends
Economic
Social
Cultural
Demographic/Environmental
Political, Legal, Governmental
Technological Competitors
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Ch 1 -13
Basic Tenet of Strategic Management
External Opportunities and Threats
Strategy Formulation
Take advantage ofExternal Opportunities
Avoid/minimize impact ofExternal Threats
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Ch 1 -14
Controllable activities performedespecially well or poorly
Determined relative to competitors
Internal Strengths and Weaknesses
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Ch 1 -15
Typically located in functional areas of the firm
Management
Marketing Finance/Accounting
Production/Operations
Research & Development Management Information Systems
Internal Strengths and Weaknesses
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Ch 1 -16
Assessing the Internal Environment
Internal Strengths and Weaknesses
Internal Factors
Performance Measures
Financial Ratios
Industry Averages
Survey Data
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Ch 1 -17
Specific results that an organization
seeks to achieve in pursuing its basicmission
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
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Means by which long-term objectivesare achieved
Strategies
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Strategies Examples
Geographic expansion
Diversification
Acquisition
Product development
Market penetration
Retrenchment
Divestiture
Liquidation
Joint venture
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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
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Strategic Management Process
Dynamic & continuousMore formal in larger
organizations
Strategic Management Model
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Strategic Management
Communication is a key tosuccessful strategic management
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Benefits of Strategic Management
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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 StrategicPlanning Lack of knowledge of strategic planning
Poor reward structures
Fire fighting
Waste of time
Too expensive
Laziness
Content with success
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Ch 1 -29
Why Some Firms Do No StrategicPlanning (continued)
Fear of failure
Overconfidence
Prior bad experience
Self-interest
Fear of the unknown
Honest difference of opinion
Suspicion