MANAGING STRATEGY INTRODUCTION TO STRATEGIC MANAGEMENT

Module Learning Outcomes

• Critical Understanding of Strategic Management & its Contribution to Organizational Purpose and Development.

• Thorough Grasp of the Techniques of Strategic Appraisal and the Exploration and Evaluation of Strategy Options. • Demonstrate an Understanding of the Problems of Making Strategic Choices from Limited Data and the Limitations of Model Driven Analysis.

• Recognition of the Difficulties Associated with the Planning and Implementation of Strategies and the Problems for Organizations' in Changing Internal Beliefs and Perceptions to Maintain a Viable Fit With a Changing Environment.

Strategy is the direction and scope of an

organization over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations.

Strategic Decisions Deal with…

• Direction Where is the business trying to get to in the long-term? •

Scope

- Which markets should a business compete in and what kind of activities are involved in such markets? • Advantage How can the business perform better than the competition in those markets?

• Resources What resources (skills, assets, finance, relationships, technical competence, facilities) are required in order to be able to compete?

• Environment What external, environmental factors affect the businesses' ability to compete?

• Stakeholders What are the values and expectations of those who have power in and around the business?

Strategic Decisions are ..

• • • • • • Complex in Nature Made with imperfect Information (Uncertainty) Affects & Guides Operational decisions Requires Integrated Approach (External & Internal) Involves Considerable Change Influenced by the values and personalities of the one who make such decisions

Terminology

• • • • • • • • • • Vision Mission Goals Objectives Competitive Advantage Strategic Management Business Strategy Corporate Strategy Operational Strategy Strategy Drift

Vision & Values

• Values form the foundation of a business’ management style • Values provide the justification of behavior and, therefore, exert significant influence on decisions.

• If “values” shape the behavior of a business, what is meant by “vision”?

• It is vision of how a company will change and improve in the future and the vision ideally – Provides future direction – Expresses a consumer benefit – Is realistic – Is motivating

Mission: "To become the number one produce store in Main Street by selling the highest quality, freshest farm produce, from farm to customer in under 24 hours on 75% of our range and with 98% customer satisfaction.“ Vision : "We help the families of Main Town live happier and healthier lives by providing the freshest, tastiest and most nutritious local produce: From local farms to your faster than any other store“ Vision is a Destination, Mission is a Job Description

Mission

Mission describes the organization's basic function in society, in terms of the products and services it produces for its customers

Goals and Objectives

• Goals are General statement of aim or purpose • Objectives are Quantification (if possible) or more precise statement of the goals – SMART (Specific, Measurable, Achievable, Relevant, Time Bound) – In all areas of the business (Market standing, Innovation, Productivity, resources, Profitability, Management, Employees, Public responsibility)

Vision, Values, Mission, Goals and Objectives Deal with the Direction and Scope of a Business

Strategic Capability (Competitive Advantage)

Strategic capability is concerned with the resources and competences that an organization can use to provide value to customers or clients. Unique resources and core competences are the bases upon which an organization achieves strategic advantage and is distinguished from competitors.

Strategy Levels

• Corporate Strategy: is concerned with the overall purpose and scope of the business to meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. Corporate strategy is often stated explicitly in a "mission statement".

• Business Unit Strategy: is concerned more with how a business competes successfully in a particular market. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.

• Operational Strategy: is concerned with how each part of the business is organized to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.

Strategic Management

Strategic management includes

understanding the strategic position of an organization, strategic choices for the future and turning strategy into action

Strategy Process

• • • • Strategy Process in not a waterfall, its an iterative process, it never stops!

Strategies can be “Intended” Strategies can be “Emergent” Practically it is a complex combination of Intended Strategies and Emergent Strategies

Strategy Process…

• Strategic Position – The Environment – Capability (Competitive advantage) • Strategic Choice – Business Level tools – Corporate Level tools • Strategy Implementation – Organizing (Includes Controls) – – Enabling Change Management

Strategy Drift

Three Key Aspects of the Strategy Process

• Logical Aspect: Strategies logically developed and designed • Adaptation Aspect: Strategies developed as continuous process of adaptation based on the past experience • Innovation Aspect: New Ideas shaping the strategy Practically an organization cannot develop its strategies only through one of the above aspects, it has to be a combination

Lesson Summary

• Understanding Strategy • Strategic Decisions and Key Terminology • Three Key Aspects of Strategy Process

Next Week

RELATING STRATEGY TERMINOLOGY TO ONE’S OWN ORGANISATION Individual assignment and Discussion