2. 2
What Is Strategic Management About?
Sustainable competitive advantage occurs
when a firm implements a value-creating
strategy of which other companies are
unable to duplicate the benefits or find it
too costly to imitate.
An important basis for sustainable
competitive advantage is the development
of resources and capabilities.
Core competencies are resources and
capabilities (often related to functional-level
skills) that serve as a source of competitive
3. 3
Key Characteristics Of Strategic Decisions
Important;
Typically, under some Uncertainty;
Involves Alternatives, Consequences, and Choice;
Significant Commitment of Resources; and
Not Easily Reversible.
4. 4
Strategy Making : Design or Process?Strategy Making : Design or Process?
Strategy as Design
Planning and
rational choice
INTENDED
STRATEGY
Many decision makers
responding to multitude of
external and internal forces
REALIZED STRATEGY
EMERGENT
STRATEGY
Strategy as Process
Mintzberg’s Critique of Formal Strategic Planning:
•The fallacy of prediction – the future is unknown
•The fallacy of detachment -- impossible to divorce formulation from
implementation
•The fallacy of formalization --inhibits flexibility, spontaneity,
intuition and learning.
Mintzberg’s Critique of Formal Strategic Planning:
•The fallacy of prediction – the future is unknown
•The fallacy of detachment -- impossible to divorce formulation from
implementation
•The fallacy of formalization --inhibits flexibility, spontaneity,
intuition and learning.
5. 5
The Evolution of Strategic ManagementThe Evolution of Strategic Management
DOMINANT
THEME
MAIN
ISSUES
CONCEPTS
&
TECHNIQUES
IMPLEMENT-
ATION
1950s 1960s Early-mid Late1970s Late 1980s Late 1990s
1970s early 1980s early 1990s early 2000s
Budgetary Corporate Corporate Analysis of Quest for Strategic
planning & planning strategy industry & competitive innovation
control competition advantage The “New
Economy”
Financial control Planning growth Diversifica- Positioning Competitive Innovation &
ion advantage knowledge
Budgeting Forecasting & Portfolio Analysis of Resource Dynamic
project appraisal investment planning. industry & analysis. sources of
planning Synergy competition Case advantage
market competences Knowledge
share management
cooperation
Emphasis on Rise of Diversifi- Industry/market Restructuring Virtual orga-
financial corporate planning cation. selectivity. BPR. nization.
management departments Quest for Active asset Refocusing Alliances
& formal global management Outsourcing Quest for
planning market share critical mass
6. 6
The Basic Framework
Strategy: the Link between the
Firm and its Environment
The Basic Framework
Strategy: the Link between the
Firm and its Environment
THE FIRM
Goals &
Values
Resources &
Capabilities
Structure &
Systems
THE
INDUSTRY
ENVIRONMENT
Competitors
Customers
Suppliers
STRATEGY
STRATEGY
7. 7
How Does It Compare to Other
Business Classes?
Mktg. Oper
.
Strategy
Finance
Acctg. H.R.
Task
environment
Macro level
environment
The
firm
8. 8
Task Environment
Customers and Markets:
Distributors
End users
Competitors:
Competitors for Markets
Competitors for Resources
Suppliers:
Suppliers of physical resources
Suppliers of financial resources
Suppliers of human resources
10. 10
The Role of Strategy In Business is to Generate and Sustain
Value via the Linkages Between Position, Resources, and
Organization
Positioning
Resources
& Capabilities
Organization
