Chapter 2: Introduction to strategic Management

Strategic Management

1. Basic Concepts of Strategic Management

2. Strategic Management a set of managerial decisions and actions that determines the long-run performance of a corporation

3. Strategic Planning Key questions: What do we do? For whom do we do it? How do we excel?

4. " If you are planning for one year, grow rice. If you are planning for 20 years grow trees. If you are planning for centuries, grow men ". - Chinese Proverb

5. In essence, the strategic plan is a company’s game plan .

6. Phases of Strategic management Basic Financial Planning Forecast-based planning Externally oriented planning Strategic Management

7. Basic Model of Strategic Management Environmental Scanning Strategy Formulation Strategy Implementation Evaluation & Control

8. 1. Identify Existing Strategic Management Model Vision Mission Objectives Strategies

9. 2. Audit external environment 3. Audit internal environment 4. Establish long-term objectives 5. Generate , evaluate, and select strategies 6. Implement selected strategies 7. Measure & evaluate performance Strategic Management Model

10. Benefits of Strategic Management Clearer sense of Strategic vision for the firm Sharper focus on what is strategically important Improved understanding of rapidly changing environment

11. Strategic Management Process

12. Strategic Management Model

13. Environmental Scanning

14. Basic Elements of Strategic Management Environmental Scanning the development of long-range plans for the effective management of environmental opportunities and threats in light of organizational strengths and (SWOT)

15. Basic Elements of Strategic Management Strategy Formulation: Mission- the purpose or reason for the organization’s existence Vision- describes what the organization would like to become

16. Fundamental questions to be asked and answered related to Mission & Vision Who are we? What do we do? Why are we here? What kind of company are we? What kind of company do we want to become? What kind of company must we become?

17. Vision To be the premier organization operating locally & internationality that provides the complete range of financial services to all segments under one roof.   Mission To develop & deliver the most innovative products, manage customer experience, deliver quality services that contributes to brand strength, establishes a competitive advantage and enhances profitability, thus providing value to the stakeholders of the bank.  

18. Objectives - the end results of planned activity Profitability Efficiency Growth Shareholders wealth Market leadership Reputation Survival

19. Objectives Vs Goals S specific M measureable A achievable R realistic T time-bound

20. Strategies

21. Basic Elements of Strategic Management Strategies - form a comprehensive master plan that states how the corporation will achieve its mission and objectives Corporate Business Functional Policies- the broad guidelines for decision making that links the formulation of a strategy with its implementation

22. Types of Strategies Corporate Strategies Stability Growth Retrenchment Business Strategies Competitive Cooperative Functional Strategies.

23. Strategies ……..

24. Basic Elements of Strategic Management Strategy implementation : the process by which strategies and policies are put into action through the development of: Programs Budgets Procedures Evaluation and control : the process in which corporate activities and performance results are monitored so that actual performance can be compared to desired performance Performance Feedback/ Learning Process

25. Strategic Decision Making What Makes a Strategic Decision? Strategic decision making focuses on the long-run future of the organization Characteristics of strategic decision making include: Rare Consequential Directive

26. Triggering event something that acts as a stimulus for a change in strategy and can include: New CEO External intervention Threat of change of ownership Performance gap Strategic inflection point

27. Mintzberg’s Modes of Strategic Decision Making Entrepreneurial Adaptive Planning Logical incrementalism (Quinn)

28. Strategic decision making process Evaluate current performance results Review corporate governance Scan and assess the external environment Scan and assess the internal corporate environment Analyze strategic (SWOT) factors Generate, evaluate and select the best alternative strategy Implement selected strategies Evaluate implemented strategies

29. Assignment Using the internet find the mission statements of three different organizations, evaluate and describe which mission is best and why?