Strategic management

Lecturer: Tran Thi Bich Nhung

Email: tranthibichnhung.cs2@[Link]

COURSE OBJECTIVES:
- Prepare students to be managers for the increasingly competitive business
world
- Emphasize on the strategic decisions, and actions that organizations take to
create sustainable competitive advantages, with the consideration of both
the internal condition and the external environment.
- Explore issues related to ethical decision making, corporate social
responsibility, stakeholder theory, and the relationship of business &
government.

1
Reading materials:
- Charles W. L. Hill, Gareth R. Jones, 2009, Essentials of Strategic
Management, Second Edition, South-Western, Cengage Learning
- Johnson, Whittington, Scholes (2012) Fundamentals of Strategy, Pearson.

ASSESSMENTS:
- Formative assessment: 10%
- Mid – term assessment: 30%
- Final exam: 60%

2
 Mid – term assessment:
- form groups of 4 or 5
- research one of the real companies
- conduct a professional case analysis
- information from various sources
- Deadline: class 10
- Presentation: may be class 11-12-13

Mid – term assignment:

- Chapter 1: introduction about the company
- Chapter 2: Analyzing the business environment
• Analyzing the business environment based on the
theory students study
• Providing the responsibility of each student

3
 CONTENTS:
- Chapter 1: Introduction to strategic management
- Chapter 2: Business environment analysis
- Chapter 3: Business level strategy
- Chapter 4: Corporate level strategy
- Chapter 5: International strategy
- Chapter 6: Strategic implementation and control

Chapter 1:
INTRODUCTION TO
STRATEGIC MANAGEMENT

4
CONTENTS:
- Basic concepts of Strategy
- Strategic management process
- Strategic management as an emergent issues
- Factors affect on strategic management

BASIC CONCEPTS OF
STRATEGY

5
 Strategy: concepts
Strategy is a set of actions that managers
take to increase their company’s
performance relative to rivals
- (Source: Charles W. L. Hill and Gareth R. Jones, 2009)

Managers
- Corporate level managers
- Business level managers
- Functional managers

6
Managers
- Corporate - level managers
- defining what bzn the company should be in
- allocating resources
- formulating and implementing
- providing leadership for entire organization
- overseeing the strategic development
- maximizing profitability and profit growth

Managers
- Business - level managers
- translating the statement of direction and intent
into the strategies for individual bzn
- concerning withh a particular bzn (particular
products/product lines)

7
Managers
- Functional - level managers
- specific functions or ope
- developting functional strategies
- implementing the strategies
- providing most of important in4

(closer to the customers)

corporate-lvl

bzn-lvl

functional-lvl

8
 corporate-lvl -> depends

corporate-lvl -> depends

Strategy: concepts

9
 Strategy: concepts
- “Strategy is a pattern in a stream of
decisions”
- “Strategy is the long – term direction
of an organization”
- Henry Mintzberg
Not as planed,
can emerge in
more special
ways

Strategy: concepts
- “Strategy is a pattern in a stream of decisions”.
Strategy is not always pre-planned and can emerge over time from
consistent behaviors. I underlines that strategies can develop
spontaneously, adapting to changed in the business environment and
learning from the past experiences.

- “Strategy is the long – term direction”

- considering the long-term decisions and being mindful of how they fit
into the overall decisions
- taking a holistic view of the organization, considering the external
environment, internal resources and the organization’s mission,
vision, values as well as objectives.

10
 Strategy: concepts

1-21

Strategy: concepts
- Deliberate strategy
+ developed and implemented deliberately and with
a clear sense of purpose.
+ based on the analysis of essential data such as:
market, customer, technology and competitors.
+ a clear plan or set of actions

11
 Strategy: concepts
- Emergent strategy
+ Some refer to emergent strategy as a realized strategy.
+ Emergent strategies focus on actions that develop over time, develops
within an organization in the absence of a specific mission and goals.
+ Mintzberg maintains that emergent strategies are often successful and
may be more appropriate than intended strategies.
+ Although emergent strategies arise from the unplanned circumstances,
top management still has to evaluate emergent strategies.

12
STRATEGIC MANAGEMENT
PROCESS

Strategic Management process

1-26

13
Strategic Management process

1-27

Strategic Management process

(Nguồn: Charles W. L. Hill and Gareth R. Jones, 2009)

1-28

14
 Strategic management process
Strategic management includes:
1. Developing mission statement
2. External environmental scanning
3. Internal environmental scanning
4. Strategic formulation
5. Strategic implementation

Mission statement

Mission Visions
The purpose for The desired future
the existence of state of the
the company company

Mission
Core Values
statement
How managers and
Major Objectives employees conduct
themselves, How
Precise and they do business
measurable
desired future
state or what
must be done Copyright © 2016 Pearson Education, Ltd.

15
Strategic Management process
 External environment: factors and forces
outside the organization that affect its
operation and performance
 Opportunities mention favorable external
factors that could give an organization a
competitive advantage
 Threats indicate factors that endanger the
integrity and profitability of company
 Industry, macro and global environment

1-31

Strategic Management process

 Global environment:
- Move some production facilities to another country
- Should expand in emerging markets
- Pay attention to new competition from emerging
nations

1-32

16
 Strategic Management process

 Internal environment refers to the factors within

an organization, including resources and
capabilities
 Strengths and Weaknesses
 Strengths are things that the company does
particularly well or in a way that distinguishes the
company from the competitors
 weaknesses refer to internal initiatives that are
underperforming
1-33

Internal environment analysis

- A competitive advantage refers to the ability of a
company to outperform its competitors in the
marketplace.
- A company is said to have a competitive advantage
when its profitability is greater than the average
profitability of all firms in the industry
- A company has a sustained competitive advantage
when it is able to maintain superior profitability
over a number of years.

17
Strategic Management process
 Formulating strategies
Plan a series of strategic alternatives
Base on opportunities, threats,
strengths, weaknesses, mission
statement
Be required to identify the set of
strategies that will create and sustain
competitive advantage
corporate, business, functional
1-35

Strategic Management process

1-36

18
Internal environment analysis
1/ Corporate strategy describes the company’s
overall direction and management of its
various businesses and product lines.
2/ Business strategy usually occurs at the
business unit, emphasizes improvement of
the competitive position of products or
services in the specific industry or market
segment

- Industry life cycle analysis

19
Internal environment analysis
3/ Functional strategy aims at improving the
effectiveness of the operation to maximize
resource productivity
4/ Global strategy concentrates on how to
expand operation outside the home country
to grow and prosper in the global market

Strategic Management process

 implementing Strategies
 Involve taking the actions at the functional,
business and corporate level to execute a
strategic plan.
 Strategic implementation also requires
designing the best organization structure,
culture and control system to put a chosen
strategy into action

1-40

20
 Strategic Management process
 implementing Strategies
 its execution must be monitored
 This information may become inputs for the next
cycle of strategic formulation and
implementation
 Reaffirm or suggest the changes for the future.
 Strategicgoals may be too optimistic or too
pessimistic.

1-41

Internal environment analysis

(1) Apple Inc.:
• Strength: Innovative design and advanced technology.
• Competitive Advantage: High-quality, user-friendly products that
command premium pricing.
(2) Amazon:
• Strength: Highly efficient logistics and supply chain.
• Competitive Advantage: Fast delivery times and a wide range of
products available for quick purchase.
(3) Tesla:
• Strength: Cutting-edge electric vehicle technology and brand
appeal.
• Competitive Advantage: Leadership in the electric vehicle market
and strong consumer loyalty

21
Strategic Management process

1-43

Strategic Management process

 Mission
purpose or reason
for the
organization’s - What’s our business?
- What will the company be?
existence - What should the company
be?
 Brief– clear –
informative – simple
and direct

1-44

22
 Mission statement

Strategic Management process

 Vision
The desired future
state of a company
 Concise – futuristic –
realistic – aspirational.

1-46

23
Strategic Management process
 Values
 Statements of how managers and employees of a
company should conduct themselves, how they do
business, and what kind of organization they
should build to help a company achieve its
mission.
 Memorable – actionable - timeless

1-47

Strategic Management process

 Goals
 A precise and measurable desired future
state that a company attempts to realize
 Well – structured goals should be SMART

1-48

24
Strategic management as an
emergent issues

25
 1-51

Strategy making in an unpredictable world

- VUCA environment

26
 Autonomous action: strategy making by
lower – level managers
- individual employee deep within an
organization often exert a profound
influence over the strategic direction of
the firm.
- Action taken by lower – level managers
who formulate new strategies and work to
persuade top level managers to alter the
strategic priorities of a company.

Serendipity
- many successful strategies are not result of well thought – out
plans, they come from serendipity.
- Serendipity can open up the profitable avenues for the company.

27
 Impact of Globalization
 Globalization
has changed the way modern
corporations do business
Access to wider customer base
Access less expensive labor and
resources

1-55

Impact of Innovation

 Innovation
 describes new products, services, methods,
and organizational approaches that allow the
business to achieve extraordinary returns

 It is the implementation of potential innovations

that truly drives businesses to be remarkable.

1-56

28
Impact of Sustainability (1 of 2)

 Sustainability
refers to the use of business
practices to manage the triple
bottom line

1-57

Impact of Sustainability (2 of 2)

The triple bottom line involves:

1. the management of traditional profit/loss
2. the management of the company’s social
responsibility
3. the management of its environmental
responsibility

1-58

29
Benefits of Strategic Management

- Clearer sense of strategic vision/mission

for the firm
- Sharper focus on what is strategically
important
- Improved understanding of a rapidly
changing environment

30