Lecture Strategic Management: Lesson 1 - Introduction and overview

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Lecture Strategic Management - Lesson 1: Introduction and overview has content 1.1. The definition of strategy and its importance, 1.2. Charting a company’s direction: Vision and Mission, Objectives and Strategy, 1.3. Strategy, ethics and corporate social responsibility.

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Nội dung Text: Lecture Strategic Management: Lesson 1 - Introduction and overview

Lesson 1 – INTRODUCTION AND OVERVIEW McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
LESSON 1 OUTLINE  1.1. The definition of strategy and its importance  1.2. Charting a company’s direction: Vision and Mission, Objectives and Strategy  1.3. Strategy, ethics and corporate social responsibility © 2013 by The McGraw-Hill Companies, 1–2 1-2
LO1 Understand why every company needs a sound strategy to compete successfully, manage its business operations, and strengthen its prospects for long-term success. LO2 Develop an awareness of the five most dependable strategic approaches for setting a company apart from rivals and winning a sustainable competitive advantage. LO3 Understand that a company’s strategy tends to evolve over time because of changing circumstances and ongoing management efforts to improve the company’s strategy. LO4 Learn why it is important for a company to have a viable business model that outlines the company’s customer value proposition and its profit formula. LO5 Learn the three tests of a winning strategy. 1-3
LO6 Grasp why it is critical for company managers to have a clear strategic vision of where a company needs to head and the importance of setting both strategic and financial objectives. LO7 Gain an understanding of conditions that give rise to unethical business strategies and behavior, the costs of business ethics failures and the concepts of corporate social responsibility and environmental sustainability. 1-4
1.1. THE DEFINITION OF STRATEGY AND ITS IMPORTANCE McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
1.1.1. The definition of Strategy
Strategy’s Three Central Questions  Where are we now? Ø Current financial performance Ø Market standing Ø Competitive resources and capabilities Ø Changing industry conditions  Where do we want to go from here? Ø What buyer needs to try to satisfy? Ø Which growth opportunities to emphasize? Ø How to change the business makeup?  How are we going to get there? Ø Which competitive moves and business approaches to use as a strategy? 1-7
What Do We Mean By Strategy? A firm’s strategy is all about how: Ø How to attract and please customers. Ø How to compete against rivals. Ø How to position the firm in the marketplace to capitalize on attractive growth opportunities. Ø How best to respond to changing economic and market conditions. Ø How to manage each functional piece of the business. Ø How to achieve the firm’s performance targets. 1-8
FIGURE 1.1 Elements of a Company’s Strategy 1-9
 Core Concept  A company’s strategy consists of the competitive moves and business approaches management has developed to attract and please customers, compete successfully, capitalize on opportunities to grow the business, respond to changing market conditions, conduct operations, and achieve performance objectives. 1-10
1.1.2. Strategy and the Quest for Competitive Advantage
1.1.2. Strategy and the Quest for Competitive Advantage  Gaining a sustainable competitive advantage requires: Ø Choosing to compete differently by doing what rivals don’t do or can’t do. Ø Appealing to buyers in ways that set the firm apart from its rivals. Ø Staking out a market position that is not crowded with strong rivals. 1-12
McDonald’s Strategy in the Quick-Service Restaurant Industry Key initiatives of the Plan-to-Win strategy included: • Improved restaurant operations • Affordable pricing • Wide menu variety and beverage choices • Convenience and expansion of dining opportunities • Ongoing restaurant reinvestment and international expansion 1-13
 Core Concept  A firm achieves sustainable competitive advantage when an attractively large number of buyers develop a durable preference for its products or services over the offerings of competitors, despite the efforts of competitors to overcome or erode its advantage. 1-14
 Concept to Action  Mimicking the strategies of successful industry rivals—with either copycat product offerings or efforts to stake out the same market position— rarely works. A creative, distinctive strategy that sets a firm apart from rivals and yields a competitive advantage is a firm’s most reliable ticket for earning above-average profits. 1-15
Choosing a Strategic Approach 1. A low-cost provider strategy 2. A broad differentiation strategy 3. A focused low-cost strategy 4. A focused differentiation strategy 5. A best-cost provider strategy 1-16
Choosing a Strategic Approach low-cost provider broad focused differentiation low-cost focused best-cost differentiation provider 1-17
1.1.3. Why Strategy Evolves Over Time
1.1.3. Why Strategy Evolves Over Time A strategy changes over time as: Ø Competitors make unexpected moves Ø The needs and preferences of buyers change Ø New market opportunities emerge Ø Managers develop new ideas to improve the strategy Ø Evidence mounts that the strategy is not working well A strategy evolves: Ø Incrementally or dramatically Ø Proactively and adaptively 1-19
 Concept to Action  Changing circumstances and ongoing management efforts to improve the strategy cause a company’s strategy to evolve over time—a condition that makes the task of crafting a strategy a work in progress, not a onetime event. 1-20