Themes of Strategic Management __ Strategy as a response to or initiation of change: Reactive Vs. Proactive Strategy

__ Strategy as developing and sustaining a niche or a competitive/distinctive advantage:

__ Strategy as a number of Ps: _ Plan _ Process _ Pattern (as a stream of decisions) _ Ploy

__ Strategy as redefinition of an organization or an aspect of its operation

__ Strategy as a bridge between organization and environment

__ Strategy as a major decision: Strategy vs. Policy

Generic Strategies _ Porter’s 5 Generic Strategies of: a) Cost Leadership b) Product/Service Differentiation c) Focused Cost Leadership d) Focused Differentiation e) Integrated Cost Leadership & Differentiation

(all implemented via Value Chain)

_ Product and Market Strategies of: a) Product Development b) Market Development c) Market Penetration

_ Retrenchment and Defensive Strategies of: a)Divestiture/Spin off b)Liquidation c)Lay off/down sizing d)Restructuring

_ Prospective/Offensive Strategies of: a)Innovation and R&D b)First Mover (Second Mover)

_ Strategic Alliances of: a)Merger and Acquisition b)Joint Venture c)Strategic Cooperation

_ Integration/Outsourcing Strategies of: a)Vertical (forward and backward) strategies

b)Horizontal Strategies

_ Diversification Strategies of: a) Conglomerate Diversification

d) Concentric Diversification

Internal Analysis of Organization  Organizational Goals/Mission Statement  Organizational Culture  Internal Resources via Functional Areas Analysis
_ Finance

_ Marketing

_ Production/Operations Management

_ Human Resources

_ R&D  Political Realities ________________________________________ Sum of Internal Analysis: Identifying the Critical Resources of the Firm and Recognizing the Strengths and Weaknesses of the Firm.

Elements of Mission Statement
Mission Statement

 Principal Customer

 Principal Product

 Geographic Domain

 Technology

 Profitability, Growth and Survival

 Philosophy and Values

 Employee Relations

 Self Concept (factual)

 Desired Public Image

Example of a Mission Statement:

Organizational Culture:

A set of values, beliefs a practices that are shared over an extended period of time by organizational members.

Culture vs. Cultures vs. Sub-Cultures vs. Counter-Cultures

Sources/Generators of Organizational Culture:

* Values, Beliefs and Visions of Founders and/or Leaders of an Organization. * Organization’s History * Organization’s Design and Structure (Centralization, Formalization and Complexity): How much participation does it produce and sustain? * REWARDS – “You Reap What You Sow”, On the Folly of Rewarding A while Hoping for B! * Verbal Practices: Talks and their Subject(s), Titles, References, Lingo, Emphasis, Stories, Legends, Rationale. Listen and Learn. The talk culture. * Non-Verbal Practices: Events, Ceremonies, Colors, Physical Conditions, Rituals, etc.

Sum-Up Culture: e.g., work hard, play hard. Business vs. Artistic culture, etc.

Functional Resouces/Capabilities Functional Resources/Capabilities: Financial: Essential Tools: Financial Statements, Budgets and Ratios. Where to Borrow From? -- Owners (e.g., via retained earnings, common stocks) -- Long Term Creditors (e.g., Long Term Notes) -- Short Term Creditors (e.g., Commercial Banks) Investment in Fixed Assets: