McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Chapter Strategic Management McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Learning Objectives After reading this chapter, you should be able to: z Implement the steps in the strategic management process z Conduct an analysis of the firm’s strengths, weaknesses, opportunities, and threats z Identify the factors that create a sustained competitive advantage z Link external and internal environment data to determine a firm’s strategic intent and mission z Choose appropriate business strategies at the corporate and business-unit levels McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved The Strategic Management Process z It is the job of top level management to chart the course of the entire enterprise z It consists of: ¾ ¾ ¾ McGraw-Hill Analysis of the internal and external environment of the firm Definition of the firm’s mission Formulation and implementation of strategies to create or continue a competitive advantage © 2004 The McGraw-Hill Companies, Inc All rights reserved The Strategic Management Process (continued) z Strategic management involves both long-range thinking and adaptation to changing conditions z Strategies should be designed to generate a sustainable competitive advantage z Competitors should be unable to duplicate what the firm has done or should find it too difficult or expensive McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Components of the Strategic Management Process: Analyze the external and internal environments Define strategic intent and mission Formulate strategies Implement strategies Assess strategic outcomes McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved SWOT Analysis z Commonly used strategy tool: SWOT ¾ z z z Strengths, Weaknesses, Opportunities, Threats Step 1: Analyze the organization’s internal environment, identifying its strengths and weaknesses Step 2: Analyze the organization’s external environment, identifying its opportunities and threats Step 3: Cross-match ¾ ¾ ¾ ¾ McGraw-Hill Strengths with opportunities Weaknesses with threats Strengths with threats Weaknesses with opportunities © 2004 The McGraw-Hill Companies, Inc All rights reserved The External Environment z Company leaders must study the external environment in order to: ¾ ¾ ¾ z Identify opportunities and threats in the marketplace Avoid surprises Respond appropriately to competitors’ moves A major challenge is to gather accurate market intelligence in a timely fashion, and transform it into usable knowledge to gain a competitive advantage McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Components of External Analysis Scanning A ssessing McGraw-Hill M onitoring Forecasting © 2004 The McGraw-Hill Companies, Inc All rights reserved Scope of the External Analysis G eneral Environm ent C om petitor A nalysis McGraw-Hill The Industry Strategic G roups © 2004 The McGraw-Hill Companies, Inc All rights reserved .. .Chapter Strategic Management McGraw-Hill © 2004 The McGraw-Hill Companies, Inc All rights reserved Learning Objectives After reading this chapter, you should be able... reserved The Strategic Management Process z It is the job of top level management to chart the course of the entire enterprise z It consists of: ¾ ¾ ¾ McGraw-Hill Analysis of the internal and