Strategic management

E-Learning
STRATEGIC
MANAGEMENT

Expected Learning Outcomes:
 Learn the techniques on strategic thinking, strategic planning and decision
making to maximize your competitive advantage and drive profits.
 How to move beyond traditional ways of customer interaction to create a new
business model with innovation.
 Best practices for utilizing resources, creating a competitive advantage and
improving your strategic position in the market
 Develop the management skills to face the workplace challenges, such as
having difficult conversations, leading teams, communication and dealing with
complexity
 Understanding the social responsibility in strategy management.

To p i c s
Topic 1 : The Strategic Management Process
Topic 2 : Essential Management Skills for
Leaders
Topic 3 : Goal Settings
Topic 4 : Strategic Leaders
Topic 5 : Decision Making for Managers
Topic 6 : Innovation and Strategy
Topic 7 : Critical Thinking and Problem Solving
Topic 8 : Teamwork and Communication Skills
Topic 9 : Creative Thinking

Topic 1
The Strategic
Management
Process

Topic 1 : The Strategic Management Process
An Introduction to Strategic Management
• Strategy is about achieving competitive advantage by delivering a value added
products or services to the customer, having a clear view of how to position yourself
uniquely in your industry.
• It is a systems approach in identifying and making the necessary changes and
measuring the organization performance in order to achieve its vision.
• Strategic management includes setting objectives for the company, analyzing the
actions of competitors, environmental scanning (both external and internal), strategy
formulation (strategic or long-range planning), strategy implementation, and
evaluation and control.
• Strategic management is the combination of strategic planning and strategic
thinking.
 Strategic planning is the identification of achievable goals.
 Strategic thinking is the ability to identify the needs of the organization to
achieve the goals through strategic planning.
• Strategic management emphasizes the monitoring and evaluating of external
opportunities, threats strengths and weaknesses.

• Change in strategy happens due to triggering events, for example ;-
 Appointment of a new CEO
 External intervention for example a rejection or new demand
 Threat of a change in ownership for example another organization takeover
 A performance gap when performance does not meet expectations example
sales and profits down.
 When major change takes place due to the introduction of new technologies,
a different regulatory environment, a change in customers expectation.

Benefits of strategic management :
 Clearer sense of strategic vision for the firm.
 Sharper focus on what is strategically important.
 Improved understanding of a rapidly changing environment.
To be successful in the long-run, companies must not only be able to execute current
activities to satisfy an existing market, but they must also adapt those activities to
satisfy new and changing markets.
Strategic Management begins with few simple questions below .
• 1. Where is the organization now?
• 2. If no changes are made, where will the organization be in one year? two years?
five years? 10 years? Are the answers acceptable?
• 3. If the answers are not acceptable, what specific actions should management
undertake? What are the risks and payoffs involved?

Types of Strategy
• The typical business firm usually considers three types of strategy: corporate,
business, and functional.
TYPE OF STRATEGY
Describes a company’s overall
direction in terms of its general
attitude toward growth and the
management of its various
businesses and product lines.
Corporate strategies typically fit
within the three main categories
of stability, growth, and
retrenchment.
Occurs at the business unit or
product level, and it
emphasizes improvement of the
competitive position of a
corporation’s products or
services in the specific market
segment served by that
business unit.
Business strategies may fit
within the two overall
categories, competitive and
cooperative strategies
Is the approach taken by a
functional area to achieve
corporate and business unit
objectives and strategies by
maximizing resource
productivity.
It is concerned with developing
and nurturing a distinctive
competence to provide a
company or business unit with a
competitive advantage.
Corporate strategy Business strategy Functional strategy

Responsibilities of the Board of Directors
• Inside directors (sometimes called management directors) are typically officers or
executives employed by the corporation.
• Outside directors (sometimes called non-management directors) may be
executives of other firms but are not employees of the board’s corporation
• Five board of director responsibilities, listed in order of importance:
 Setting corporate strategy, overall direction, mission, or vision
 Hiring and firing the CEO and top management
 Controlling, monitoring, or supervising top management
 Reviewing and approving the use of resources
 Caring for shareholder interests

Responsibilities of the Board of Directors
• The role of the board of directors in strategic management is to carry out three
basic tasks:
 Monitor: Bringing to management’s attention developments mistakes or
performance gaps.
 Evaluate and influence: Examine management’s proposals or decisions,
agree or disagree with them, give advice and offer suggestions and outline
alternatives.
 Initiate and determine: Present corporation’s mission and specify strategic
options to its management.

Basic Strategic Management Model
• Strategic management consists of four basic elements:
 Environmental scanning
 Strategy formulation
 Strategy implementation
 Evaluation and control
• An organization must scan the external environment to identify possible
opportunities and threats and its internal environment for strengths and
weaknesses before starting to formulate.

• Environmental scanning is the monitoring, evaluation, and dissemination of
information from the external and internal environments to key people within the
corporation.
• The simplest way to conduct environmental scanning is through SWOT analysis.
SWOT is an acronym used to describe the particular Strengths, Weaknesses,
Opportunities, and Threats that are strategic factors for a specific company.
• Strategy formulation is the development of long-range plans for the effective
management of environmental opportunities and threats, in light of corporate
strengths and weaknesses (SWOT).
• It includes defining the corporate mission, specifying achievable objectives,
developing strategies, and setting policy guidelines.

• Strategy implementation is a process by which strategies and policies are put
into action through the development of programs, budgets, and procedures.
• Evaluation and control is a process in which corporate activities and
performance results are monitored so that actual performance can be compared
with desired performance. Managers at all levels use the resulting information to
take corrective action and resolve problems.

Strategic Planning
• Top management must initiate and manage the strategic planning process by
first asking business units and functional areas to propose strategic plans for
themselves.
• Bottom-up strategic planning may be most appropriate in multidivisional
corporations operating in stable organization, but that top-down strategic
planning may be most appropriate for firms operating in turbulent
environments.
• Other organizations engage in concurrent strategic planning in which all the
organization’s units draft plans for themselves after they have been provided
with the organization’s overall mission and objectives.
• Board of directors expects top management to manage the overall strategic
planning process so that the plans of all the units and functional areas fit
together into an overall corporate plan.
• Therefore, top management must evaluate unit plans and provide the
feedback.

Strategic Thinking
• Strategic Thinking is the ability to judge whether a specific situation or
information is right or wrong, based on its ability to help achieve a positive
business outcome, or solve a business issues.
• Strategic thinking is not only a new way of thinking about key elements of the
current business but also involves on environmental scanning, understanding
the key factors and trends around the business that could have an impact on
future results.
• Strategic thinking is a mindset that allows :
Anticipate future events and issues
Create alternative scenarios
Understand your options
Decide on your objectives
Determine the direction to achieve those objectives on a
winning basis

Social Responsibility and Ethics in Strategy Management
• The concept of social responsibility proposes that a private corporation has
responsibilities to society that extend beyond making a profit.
• Managers must be able to deal with these conflicting interests in an ethical
manner to formulate a viable strategic plan.
• Business organizations have four responsibilities: economic, legal, ethical, and
discretionary.
 Economic responsibilities of a business organization’s management are to
produce goods and services of value to society
 Legal responsibilities are defined by governments in laws that
management is expected to obey.
 Ethical responsibilities of an organization’s management are to follow the
generally held beliefs about behavior in a society.
 Discretionary responsibilities are the purely voluntary obligations a
corporation assumes. Examples are philanthropic contributions, training
the hard-core unemployed, and providing day-care centers.

Social Responsibility and Ethics in Strategy Management
• Unethical Behaviour happens for some reasons ;-
 There is no worldwide standard of conduct for business
 Cultural norms and values vary between countries and even between
different geographic regions and ethnic groups within a country
 Differences in values between business people and key stakeholders
• Ethics are defined as the consensually accepted standards of behavior for an
occupation, a trade, or a profession.
• A Codes of Ethics specifies how an organization expects its employees to
behave while on the job.
• The management should not only develop a comprehensive code of ethics but
also communicate the code in order to improve its employees’ ethical behavior

Porter’s Five forces Model
• Porter's Five Forces is a powerful tool for understanding the competitiveness of
business environment, and for identifying strategy's potential profitability.
• This model was created by Michael Porter in 1979 to explain how five key
competitive forces affecting an industry .
Rivalry
among existing
competitors
Bargaining
power of
supplier
Threat of
substitutes
Bargaining
power of buyers
Threats of
new entrants
Porter’s Five
forces

• New entrants to an industry typically bring to it new capacity, a desire to gain
market share, and substantial resources
• An entry barrier makes it difficult for a company to enter an industry example
product differentiation, switching cost, access to distribution channels, government
policy and etc.
• A competitive move by one firm can be expected to have a noticeable effect on its
competitors and thus may cause retaliation.

• Buyers affect an industry through their ability to force down prices, bargain for
higher quality or more services, and play competitors against each other.
 A buyer purchases a large proportion of the seller’s product or service
 Changing suppliers’ costs very little
 The purchased product is unimportant to the final quality or price of a
buyer’s products or services and thus can be easily substituted without
affecting the final product adversely
• Suppliers can affect an industry through their ability to raise prices or reduce the
quality of purchased goods and services.
 The supplier industry is dominated by a few companies, but it sells to many
 Its product or service is unique and/or it has built up switching costs
 Substitutes are not readily available
• A substitute product is a product that appears to be different but can satisfy the
same need as another product.

Quiz 1
1. What are the four basic elements in Strategic Management?
2. What are the Porter’s 5 forces that affect an industry in creating the organization
strategy?
3. List down the 3 types of strategies.

Topic 2
Essential
Management
Skills for
Leaders

Topic 2 : Essential Management Skills for Leaders
• Management skills can be developed through learning and practical experience as
a manager.
• A manager with good management skills is able to drive the company’s mission
and vision or business goals forward.
• Management and leadership skills are often used interchangeably as they both
involve planning, decision-making, problem-solving, communication, delegation,
and time management.
• The three basic types of management skills include:
 Technical Skills
Provide managers the ability and the knowledge to use a variety of techniques
to achieve their objectives.
 Conceptual Skills
Skills on knowledge and ability for abstract thinking and formulating ideas.
 Human or Interpersonal Skills
Managers’ ability to interact, work or relate effectively with people.

• Communication skills involves the flow of information within the organization,
whether formal or informal, verbal or written, vertical or horizontal, and it
facilitates smooth functioning of the organization. Manager with good
communication skills able to communicate well to employees thus be able to
achieve the company’s set goals and objectives easily
• Decision making is another important skill in a manager’s success since all
managers make numerous decisions in their organizations and are responsible
for establishing decision-making processes.
• Delegation helps the manager to avoid wastage of time, optimizes productivity,
and ensures responsibility and accountability on the part of employees.
• Problem-solving in management is about finding the best solution to solve the
frequent problems that can arise in a workday.
• Motivation helps to bring positive response from the employees or certain
stakeholders in order to achieve the deliverables.

Quiz 2
1. Name a few of essential skills that every manager should have to drive the
company’s mission and vision or business goals forward.

• Goal setting involves the development of an action plan designed to motivate and
guide a person or group toward a goal.
• A SMART goal is used to help guide goal setting. SMART is an acronym that
stands for Specific, Measurable, Achievable, Realistic, and Timely.
• Steps for Setting Goals
• Brainstorm goals as a group. (People support what they create, and will
accept responsibility more easily.)
• Choose from the brainstormed list those you want to attend to.
• Prioritize as a group.
• Determine objectives and plans of action for each goal. Be specific and
include deadlines.
• Move into action. Follow through.
• Continually evaluate your progress.
• Be flexible; allow your objectives to change to meet your new
circumstances.

• Employees will understand how their individual responsibilities contributing to
organizational growth, they’re more focused and motivated to achieve the goals if
the managers can connect individual goals to the company’s growth strategy .
• It is important for managers in recognizing the employees who reach or exceed
the goals that have been set to show other employees that this kind of effort is
valued by the organization.

Values, Vision, Mission and Objective
Values
Vision
Mission
Strategic Objective
Actions and KPIs
What do we stand for?
Ethics, Beliefs, Principles
Where are we going?
Hope , Ambition
What do we do ?
Motivation, Purpose
How are we going to
progress?
Plans, Goals
How do we
know?
Actions,
Resources,
Measures
Achievable
Specific,
Tangible
Aspirational

Topic 4 : Strategic Leaders
• Strategic leadership develop a vision for their organization that enables it to adapt
to or remain competitive in a changing economic and technological climate.
• Strategic leadership is about anticipating, envisioning, maintaining flexibility,
thinking strategically and empowering employees to create something new that
lead to organizational transformations or changes that bring improvement in
performance.
• The strategic leader is also known as change driver. As a change driver, the
leader creates and develops change management strategies and evolves
techniques to make the employees accept the changes .
• Effective strategic leadership is at the core of creating a sustainable competitive
advantage in rapidly changing organizations.

The Strategic Leadership Process comprised of four steps:
 Competence
o The right competencies, the appropriate temperament, a drive to
succeed and inspire the team to achieve goals.
 Vision
o Vision should provide strategic guidance, outlining a course for the
organization to follow
 Communication of vision
o Effectively communicate the vision to the appropriate internal groups.
 Serving others to realize the vision
o Listening and understanding to others needs will contribute to the overall
growth of the organization and the environment surrounding it.
 Managing Relationship
o Managing relationships with colleagues, executive management, and
employees is critical to becoming a strategic leader

Some of the important leadership qualities that can develop a good leader are
as below ;-
 Honesty and integrity
 Decision Making Capabilities
 Delegation and Empowerment
 Creativity and Innovation
 Emotional Intelligence
 Transparency
 Vision and purpose

In order to become a strategic leader, on must engage in the following 3
behaviors:
• Think strategically – Begin with understanding the complex relationship between
your organization and its environment. With this knowledge, one can then make
decisions that facilitate the organization’s success.
• Act strategically – Take decisive action consistent with the strategic direction of
the organization despite ambiguity and complexity.
• Influence strategically – Build commitment to the organization’s strategic
direction by inviting stakeholders into the strategic process, building relationships
inside and outside the organization, and utilizing organizational culture and
systems of influence.

Quiz 3
1. What are the 3 behaviors to become a strategic leader?

Topic 5
Decision
Making for
Managers

Eight steps in strategic decision-making process to improve the making of strategic
decisions ;-
1. Evaluate current performance results in terms of return on investment,
profitability, the current mission, objectives, strategies, and policies.
2. Review corporate governance that is, the performance of the firm’s board of
directors and top management.
3. Scanning the external environment to determine the strategic factors that
pose opportunities and threats.
4. Scanning the internal corporate environment to determine the strategic
factors that are strengths (especially core competencies) and Weaknesses.
Continue

5. Analyze strategic (SWOT) factors to (a) highlight problems and (b)
review and revise the corporate mission and objectives, as necessary.
6. Generate, evaluate, and select the best alternative strategy in light of
the analysis conducted in SWOT analysis (step 5).
7. Implement selected strategies via programs, budgets, and
procedures.
8. Evaluate implemented strategies via feedback systems, and the
control of activities to ensure their minimum deviation from plans.

Strategic Audit helps business to make the right decisions.
 A strategic audit provides a checklist of questions, by area or issue, that
enables a systematic analysis to be made of various corporate functions and
activities.
 A strategic audit can help determine why a certain area is creating problems
for a corporation and help generate the right solutions to the problem.

Quiz 4
1. Explain how does the Strategic Audit help the managers to make the right
decisions?

Topic 6 : Innovation and Strategy
• Innovation is about creating new value or better-quality products and services
that are more likely to meet customer needs.
• Innovation is the art of enhancing advantage and value creation by making
simultaneous and mutually supportive changes both to an organization’s value
proposition to customers and to its underlying operating model.
• Innovation in the company, always resulting in improved competitiveness and
competitive advantage which means increasing the profits.
• A broader product range provides an opportunity for higher sales and profits
and also reduces the risk for shareholders

5 Steps for Developing Organization Innovation Strategy
 Determine objectives and strategic approach to innovation
o Development of new, unique concepts supporting an organization's
financial viability, including its mission, and the processes for bringing
those concepts to fruition.
 Know Your Market: Customers and Competitors
o To be able to innovate and to respond to your customers’ needs, you
should listen and understand what your customers really want and
remove the rest.
 Define Your Value Proposition
o The purpose of value innovation is to achieve sustainable competitive
advantage by looking beyond your current understanding of the industry
and reforming your value proposition to stand apart from the
competition.
 Assess and Develop Your Core Capabilities
o Internal skills and knowledge are important to build innovation
 Establish Your Innovation Techniques and Systems
o Define which innovation techniques and systems do we need in to be
able to link our innovation infrastructure elements together

Quiz 5
1. List down 5 steps for developing the organization innovation strategy?

Topic 7
Critical
Thinking &
Problem
Solving

Topic 7 : Critical thinking and Problem Solving
• Critical thinking is the use of those cognitive skills or strategies that increase the
probability of a desirable outcome. It is used to describe thinking that is
purposeful, reasoned, and goal-directed and the kind of thinking involved in
solving problems, formulating inferences, calculating likelihoods, and making
decisions
• Critical thinkers operate from a broad perspective in order to make sure the
problems are solved, and they are taking acceptable risk. They recognize the
difference between short-term gains and sustainable, long-term results and lead
accordingly.
• Problem solving and critical thinking is about the usage of the knowledge, facts,
and data to effectively solve problems
• Critical thinking helps employees do the following:
o Research and gather all the necessary information for analyzing a
situation.
o Brainstorm multiple solutions to a single problem.
o Obtaining feedback from all areas prior to deciding on a course of action.

• Critical thinking is also reflective and focused, constantly evaluating the thinking
process itself. It is thinking with a purpose. Critical thinking requires a healthy
dose of skepticism and an equal measure of good judgement.
• These leaders are able to balance department or team issues with broader
company issues and embrace a larger responsibility for the success of the
organization.
• Critical thinking is the ability to deal with the contradictions and problems in
purposeful and productive way. Decisions are made using an approach that is
fair, objective, accurate and based on information that is relevant to the situation.

Quiz 6
1. What is the benefit of critical thinking and problem solving in an organization?

Topic 8
Teamwork &
Communicati
on Skills

Topic 8 : Teamwork and Communication skills
• Effective communication plays a role in keeping the team together and makes
the work atmosphere positive and lively.
• Effective team communication creates awareness and understanding that
promotes adeptness as team members complete their tasks.
• Good team communication teaches cooperation among team members that
expands to other areas of business life.
• Effective communication directly determines the success or failure of an
assignment requiring the whole team’s active involvement, and indirectly of the
business itself.
• Good teamwork structures provide organization with a diversity of thought,
creativity, perspectives, opportunities, and problem-solving approaches.
• Teamwork provides improved efficiency and productivity by incorporating
teamwork strategies.

Topic 8 : Teamwork and Communication skills
1
• The extent to which a manager accomplishes corporate goals depends on his
ability to communicate effectively to members for the execution of strategic
tasks.
2
• An effective communication strategy shape and maintains connections, allowing
your business to work efficiently toward its goals.
3
• Managers must improve their wish to transmit and improve their own
understanding of what people are trying to communicate to them.
4
• Strategic communications happen because goals are set, success metrics
determined, target audiences identified, messages developed, and appropriate
communication channels used to send a consistent message.
Roles in communication
Continue

1
• Collaborative leaders engage people outside of their direct control and getting
them to work as a team with a common goal.
2
• Coordination is about achieving efficiency and communicating on how and when
they must act.
3
• Setting up structured processes early and with the buy-in of your team helps in
getting the cooperation from the team.
4
• Within the dynamic of teamwork, it is important to understand the work they are
responsible for and make the effort to complete the tasks on time and up to the
expected standard.
Roles in Teamwork

Quiz 7
1. Explain why it is important for strategic leaders to have good communication?

Topic 9 : Creative Thinking
• Creative Thinking is the ability to create as many potential ideas (alternative
plans or options) as possible, to achieve a positive business outcome or
solving a problem.
• Being a strategic thinker means you are always observing and interpreting your
environment creatively.
• Creativity is considered to be central to strategic thinking and thinking
creatively in strategic terms has been suggested as a source of organisational
and national competitiveness.
• Steps for creative thinking
• Observe Problems of your customers.
• Find and Develop Solutions.
• Implement the Solutions. Testing the solution
• Evaluation : Target the market and see how successful you have been in
solving a problem.

Quiz 8
1. Explain why it is important for strategic leaders to have creative thinking ?

You have completed the
course. Congratulations!
Thank You.

Strategic management

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