Strategic Management

Strategic Management consists of the analysis, decisions, and actions an organization undertakes in order to create and sustain competitive advantages. 4 Key attributes of strategic management: - directs the organization toward overall goals and objectives - includes multiple stakeholders in decision making o generally has five prominent stakeholder groups: customers, employees, suppliers (of goods, services, and capital), the community at large, and the owners - incorporates short-term and long-term perspectives - recognizes trade-offs between efficiency and effectiveness

Strategic management process focused on three core activities in the strategic management processstrategy analysis, strategy formulation, and strategy implementation. Key Driving Forces: globalization, technology, and intellectual capital

Critical inputs to developing forecasts of the business environment - Environmental scanning - Environmental monitoring - Competitive intelligent o gathering associated with the collection of data on competitors and the interpretation of such data for managerial decision making Manager use these tools to enhance their environmental awareness, better understand the environment that surrounds them, and develop forecasts about the future.

Value chain analysis - A strategic analysis of an organization that uses value creating activities o Contribute to the physical creation of the product or service, its sale and transfer to the buyer, and its service after the sale o Inbound logistics, operations, outbound logistics, marketing and sales, and service - Value is the amount that buyers are willing to pay for what a firm provides them and is measured by total revenue - Operations associated with transforming inputs into final product form o Efficient plant operation o Incorporation of appropriate process technology o Efficient plant layout and workflow design Firm resources and sustainable competitive advantage - Resources must be valuable that it exploits opportunities and/or neutralize threats in the firms environment - It must be rare among firms current and potential competitors Evaluating firms performance - Financial ratio analysis o Balance sheet; Income Statement; Historical comparison; comparison with industry norms; Comparison with key competitors - Stakeholder perspective o Employees; Customers; Owners A corporations capital generally categorized in 3 areas: - Human capital o Individual capability o Knowledge o Skills o Experience of employee and managers - Social capital o Employment loyalty o Customer relationship o Informal relationship with other service provider o Corporate network - Technology/Knowledge o Patent

o Copyright o Trademarks Developing Human Capital Train and develop at all levels Encouraging widespread involvement Transferring knowledge Monitor progress and track development Evaluate human capital

360-degree evaluation system (360-degree feedback) Try to provide a mechanism to ensure right person place in the right position Retaining human capital - Cross-Training - Mentoring program How social capital helps attracting employees? - Social network o Ability to provide companys information to outsider easily Competitive advantage: Something that creates an advantage that your competitors are not capable for Three generic strategies: - Overall cost leadership o Low cost position relative to a firms peers o Manage relationships throughout the entire value chain - Differentiation o Create products and/or services that are unique and valued o Non-price attributes for which customers will pay a premium - Focus strategy o Narrow product lines, buyer segment, or targeted geographic markets o Attain advantages either through differentiation of cost leadership