Strategic Management

TS Nguyễn Thị Nguyệt Anh

Faculty of Business Management

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 About me
Doctor in applied economics in France with 7-year experience in management teaching and practical
business management in private sector in Vietnam. Interested in life-long learning with the experience
in Executive PhD program management in top ranked business school in Belgium.
Teaching interests: Strategic Management, Project Management, Management Skills, International
Business
Research interests: International trade, ASEAN, Strategic Management & Leadership.

v Education
v PhD in Economics - University de Nantes, France
v Master of Business Administration – NEU
v Bachelor of Economics – NEU
v Experience
v Learning Experience Manager – PhD Program – Antwerp Management School, Belgium
v Independent Researcher, Belgium
v Doctoral Researcher, University of Nantes, France
v Lecturer in Business Management, NEU, Vietnam
v Adventurer in private sector in Vietnam

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3 Copyright ©2017 Pearson Education, Limited 1-3
 Strategic
Management
Essentials

Chapter One

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 Learning Objectives

1. Describe the strategic-management process.

2. Discuss the three stages of strategy
formulation, implementation, and evaluation
activities.
3. Explain the need for integrating analysis and
intuition in strategic management.
4. Define and give examples of key terms in
strategic management.

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 Learning Objectives (cont.)

5. Illustrate the comprehensive strategic-

management model.
6. Describe the benefits of engaging in
strategic management.
7. Explain why some firms do no strategic
planning.
8. Describe the pitfalls in actually doing
strategic planning.
9. Discuss the connection between business
and military strategy.

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Defining Strategic Management
Strategic Management

the art and science of formulating,

implementing, and evaluating cross-
functional decisions that enable an
organization to achieve its objectives

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Defining Strategic Management
vStrategic management is used
synonymously with the term strategic
planning in this course.
vSometimes the term strategic
management is used to refer to strategy
formulation, implementation, and
evaluation, with strategic planning
referring only to strategy formulation.

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Defining Strategic Management
vA strategic plan is a company’s game
plan.

vA strategic plan results from tough

managerial choices among numerous
good alternatives, and it signals
commitment to specific markets,
policies, procedures, and operations.
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 Stages of Strategic Management

Strategy Strategy Strategy

formulation implementation evaluation

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 Stages of Strategic Management
Strategy Formulation
v developing a vision and mission
v identifying an organization’s external
opportunities and threats
v determining internal strengths and weaknesses
v establishing long-term objectives
v generating alternative strategies
v choosing particular strategies to pursue

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Strategy Formulation Decisions

vWhat new businesses to enter

vWhat businesses to abandon
vWhether to expand operations or diversify
vWhether to enter international markets
vWhether to merge or form a joint venture
vHow to avoid a hostile takeover

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 Stages of Strategic Management
Strategy Implementation
vrequires a firm to establish annual
objectives, devise policies, motivate
employees, and allocate resources so
that formulated strategies can be
executed
voften called the action stage

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 Stages of Strategic Management
Strategy Evaluation
vDetermining which strategies are not
working well
vThree fundamental activities:
vreviewing external and internal factors that
are the bases for current strategies
vmeasuring performance
vtaking corrective actions

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 Key Terms in Strategic
Management
Competitive Advantage
vany activity a firm does especially well
compared to activities done by rival firms,
or
vany resource a firm possesses that rival
firms desire.

vA firm must strive to achieve sustained

competitive advantage
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 Key Terms in Strategic
Management
Strategists
vIndividuals most responsible for the success
or failure of an organization
vHelp an organization gather, analyze, and
organize information
Vision and Mission Statements
vA vision statement answers the question
“What do we want to become?”
vA mission statement answers the question
“What is our business?”
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 Key Terms in Strategic
Management
External Opportunities and Threats
veconomic, social, cultural, demographic,
environmental, political, legal, governmental,
technological, and competitive trends and events
that could significantly benefit or harm an
organization
Internal Strengths and Internal Weaknesses
van organization’s controllable activities that are
performed especially well or poorly
vdetermined relative to competitors
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 Some Opportunities and Threats
vAvailability of capital can no longer be
taken for granted.
vConsumers expect green operations and
products.
vMarketing is moving rapidly to the Internet.
vCommodity food prices are increasing.
vAn oversupply of oil is driving oil and gas
prices down.
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 Key Terms in Strategic
Management
Long-Term Objectives
vspecific results that an organization
seeks to achieve in pursuing its basic
mission
vlong-term means more than one year
vshould be challenging, measurable,
consistent, reasonable, and clear

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 Key Terms in Strategic
Management
Strategies
vthe means by which long-term
objectives will be achieved
vmay include geographic expansion,
diversification, acquisition, product
development, market penetration,
retrenchment, divestiture, liquidation,
and joint ventures

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 Key Terms in Strategic
Management
Annual objectives
vshort-term milestones that organizations must
achieve to reach long-term objectives
vshould be measurable, quantitative, challenging,
realistic, consistent, and prioritized
vshould be established at the corporate, divisional,
and functional levels in a large organization
Policies
vthe means by which annual objectives will be
achieved

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The Strategic-Management Model

Where are we now?

Where do we want to go?

How are we going to get there?

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Comprehensive Strategic-
Management Model

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 Benefits of Strategic Management
vStrategic management allows an
organization to be more proactive than
reactive in shaping its own future;

vIt allows an organization to initiate and

influence (rather than just respond to)
activities—and thus to exert control over
its own destiny.

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Benefits to a Firm That Does
Strategic Planning

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 Financial Benefits
vBusinesses using strategic-management
concepts show significant improvement in
sales, profitability, and productivity compared
to firms without systematic planning activities

vHigh-performing firms tend to do systematic

planning to prepare for future fluctuations in
their external and internal environments

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 Nonfinancial Benefits
vEnhanced awareness of external threats
vImproved understanding of competitors’
strategies
vIncreased employee productivity
vReduced resistance to change
vClearer understanding of performance–
reward relationships

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 Why Some Firms Do No Strategic
Planning
vNo formal training in strategic
management
vNo understanding of or appreciation for
the benefits of planning
vNo monetary rewards for doing planning
vNo punishment for not planning
vToo busy “firefighting” (resolving internal
crises) to plan ahead
vView planning as a waste of time, since no
product/service is made
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 Why Some Firms Do No Strategic
Planning
vLaziness; effective planning takes time
and effort; time is money
vContent with current success; failure to
realize that success today is no guarantee
for success tomorrow; even Apple Inc. is
an example
vOverconfident
vPrior bad experience with strategic
planning done sometime/somewhere

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 Pitfalls in Strategic Planning
v Using strategic planning to gain control over decisions
and resources
v Doing strategic planning only to satisfy accreditation or
regulatory requirements
v Too hastily moving from mission development to strategy
formulation
v Failing to communicate the plan to employees, who
continue working in the dark
v Top managers making many intuitive decisions that
conflict with the formal plan
v Top managers not actively supporting the strategic-
planning process
v Failing to use plans as a standard for measuring
performance
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 Pitfalls in Strategic Planning
vDelegating planning to a “planner” rather than
involving all managers
vFailing to involve key employees in all phases of
planning
vFailing to create a collaborative climate
supportive of change
vViewing planning as unnecessary or unimportant
vBecoming so engrossed in current problems that
insufficient or no planning is done
vBeing so formal in planning that flexibility and
creativity are stifled

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How to Gain and Sustain
Competitive Advantage

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 Comparing Business and
Military Strategy
vA fundamental difference between military
and business strategy is that business
strategy is formulated, implemented, and
evaluated with an assumption of competition,
whereas military strategy is based on an
assumption of conflict
vBoth business and military organizations
must adapt to change and constantly improve
to be successful

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Excerpts from Sun Tzu’s The Art of
War Writings
vWar is a matter of vital importance to the
state: a matter of life or death, the road either
to survival or ruin. Hence, it is imperative that
it be studied thoroughly
vKnow your enemy and know yourself, and in
a hundred battles you will never be defeated
vSkillful leaders do not let a strategy inhibit
creative counter-movement

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