Description
Strategic management analyzes the major initiatives taken by a company's top management on behalf of owners, involving resources and performance in internal and external environments.[1] It entails specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs.
Strategic Management and Strategic Competitiveness
Ch1-1
Strategic Competitiveness
Achieved when a firm successfully formulates and implements a value-creating strategy
Sustained Competitive Advantage
Occurs when a firm develops a strategy that competitors are not simultaneously implementing Provides benefits which current and potential competitors are unable to duplicate
Above-Average Returns
Returns in excess of what an investor expects to earn from other investments with similar risk
Ch1-2
The Strategic Management Process
Involves the full set of:
Commitments
Decisions
Actions
which are required for firms to achieve:
Strategic Competitiveness
Sustained Competitive Advantage Above-Average Returns
Ch1-3
Strategic Inputs
Chapter 2 External Environment Strategic Intent Chapter 3 Internal Environment Strategic Mission
The Strategic Management Process
Strategy Implementation
Chapter 10 Corporate Governance
Chapter 12 Strategic Leadership Chapter 11 Structure & Control Chapter 13
Entrepreneurship
Strategy Formulation
Chapter 4 Business-Level Strategy Chapter 5 Competitive Dynamics Chapter 8 International Strategy Chapter 6 Corporate-Level Strategy Chapter 9 Cooperative Strategies
Strategic Actions
Chapter 7 Acquisitions & Restructuring
& Innovation
Strategic Outcomes
Feedback
Strategic Competitiveness Above Average Returns
Ch1-4
Chapter One: Key Themes
Challenge of Strategic Management
Changing Competitive Landscape Two Models of Superior Profitability • Industrial Organization Model • Resource-Based Model Key Stakeholder Groups
Ch1-5
Challenge of Strategic Management
Only 16 of the 100 largest U.S. companies at the start of the 20th century are still identifiable today! In a recent year, 44,367 businesses filed for bankruptcy and many more U.S. businesses failed
Competitive success is transient...unless care is taken to preserve competitive position
Ch1-6
Challenge of Strategic Management
Best Stocks of the Decade
The goals of achieving strategic competitiveness and earning aboveaverage returns are challenging The performance of some companies more than meets strategic management's challenge
% Change 1990-99
Cisco AOL Dell EMC CMGI Solectron JDS Uniphase Tellabs Clear Channel Communications Best Buy Maxim Integrated Veritas Software Charles Schwab Microsoft Sun Microsystems Safeguard Scientifics Qlogic Yahoo Qualcomm Applied Materials
124,825% 81,400% 72,400% 68,314% 57,191% 21,233% 18,755% 16,921% 13,700% 9,376% 8,735% 8,536% 7,985% 7,483% 7,163% 6,816% 6,764% 6,744% 6,388% 6,350% Ch1-7
21st Century Competitive Landscape
Fundamental nature of competition is changing
• Rapid technological changes • Rapid technology diffusions • Dramatic changes in information and communication technologies • Increasing importance of knowledge
The pace of change is relentless.... and increasing Traditional industry boundaries are blurring, such as...
• Computers • Telecommunications
Ch1-8
21st Century Competitive Landscape
The global economy is changing
• People, goods, services and ideas move freely across geographic boundaries
Traditional sources of competitive advantage no longer guarantee success New keys to success include:
• • • • Flexibility Innovation Speed Integration
Ch1-9
• New opportunities emerge in multiple global markets
• Markets and industries become more internationalized
21st Century Competitive Landscape
A country’s competitiveness is achieved through the accumulation of individual firms’ strategic competitiveness in the global economy Achieving improved competitiveness allows a country's citizens to have a higher standard of living Country Competitiveness Rankings
1999 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 1998 1 3 2 6 5 8 10 4 7 11 15 14 13 12 9 17 16 30 23 20 18 19 22 27 24 25 Country Singapore United States Hong Kong Taiwan Canada Switzerland Luxembourg United Kingdom Netherlands Ireland Finland Australia New Zealand Japan Norway Malaysia Denmark Iceland Sweden Austria Chile Korea France Belgium Germany Spain Competitiveness Index 1999 2.12 1.58 1.41 1.38 1.33 1.27 1.25 1.17 1.13 1.11 1.11 1.04 10.1 1.00 0.92 0.86 0.85 0.59 0.58 0.37 0.57 0.46 0.44 0.39 0.37 0.16 Competitiveness Index 1998 2.16 1.41 1.91 1.19 1.27 1.10 1.05 1.29 1.13 1.05 0.70 0.79 0.84 0.97 1.09 0.59 0.61 -0.18 0.25 0.37 0.57 0.39 0.25 -0.03 0.15 0.02
Alternative Models of Superior Returns
Industrial Organization Model
The External Environment An Attractive Industry Strategy Formulation
Resource-Based Model
Resources Capability Competitive Advantage
Assets and Skills
Strategy Implementation Superior Returns
An Attractive Industry
Strategy Implementation
Superior Returns
Ch1-11
I/O Model of Superior Returns
The Industrial Organization model suggests that above-average returns for any firm are largely determined by characteristics outside the firm. This model largely focuses on industry structure or attractiveness of the external environment rather than internal characteristics of the firm.
Ch1-12
I/O Model of Superior Returns
External Environment
General Environment Industry Environment Competitive Environment
Action required: Study the external environment, especially the industry environment.
Ch1-13
I/O Model of Superior Returns
External Environment An Attractive GeneralIndustry Environment
Industry Environment An industry whose Competitive structural characteristics Environment suggest above-average returns are possible
Action required: Locate an industry with high potential for aboveaverage returns.
Ch1-14
I/O Model of Superior Returns
External Environment Attractive GeneralIndustry Environment Industry Environment Strategy An industry whose Formulation Competitive structural characteristics
Action required: Identify strategy called for by the industry to earn above-average returns.
Environment Selection of a strategy suggest above-average with abovereturns are linked possible average returns in a particular industry
Ch1-15
I/O Model of Superior Returns
Action required: External Develop or acquire assets Environment Attractive and skills needed to GeneralIndustry Environment implement the strategy. Strategy Industry Environment An industry whose Formulation Competitive structural characteristics Environment Assets and Skills Selection of a strategy suggest above-average
with abovereturns arelinked possible Assets and average returns in a skills required to implement particular industry a chosen strategy
Ch1-16
I/O Model of Superior Returns
Action required: External Use the firm’s strengths Environment Attractive (its assets or skills) to GeneralIndustry Environment implement the strategy. Strategy Industry Environment An industry whose Formulation Competitive structural characteristics Environment Assets and Skills Selection of a strategy suggest above-average
with abovereturns arelinked possible Assets and skills average returns in a Strategy required to implement Implementation particular industry a chosen strategy Selection of strategic actions linked with effective implementation of the chosen strategy
Ch1-17
I/O Model of Superior Returns
Action required: External Maintain selected strategy Environment Attractive in order to outperform GeneralIndustry Environment industry rivals. Strategy Industry Environment An industry whose Formulation Competitive structural characteristics Environment Assets and Skills Selection of a strategy suggest above-average
with abovereturns arelinked possible Assets and skills average returns in a Strategy required to implement Implementation particular industry Superior Returns a chosen strategy Selection of strategic actions linked with Earning of aboveeffective implementation average returns of the chosen strategy
Ch1-18
Resource-Based Model of Superior Returns
The Resource-Based model suggests that above-average returns for any firm are largely determined by characteristics inside the firm. This model focuses on developing or obtaining valuable resources and capabilities which are difficult or impossible for rivals to imitate.
Ch1-19
Resource-Based Model of Superior Returns
Resources
Inputs to a firm’s production process.
Action required: Identify firm resources. Study strengths and weaknesses relative to rivals.
Ch1-20
Resource-Based Model of Superior Returns
Resources Capability Action required: Determine what firm capabilities allow it to do better than rivals.
Inputs to a firm’s production process. Capacity for an integrated set of resources to perform a task or activity.
Ch1-21
Resource-Based Model of Superior Returns
Resources Capability Action required: Determine how firm’s resources and capabilities may create competitive advantage.
Inputs to a firm’s Competitive production process. Capacity for an integrated set of resources to Advantage integratively perform a Ability of a firm to task or activity. outperform its rivals
Ch1-22
Resource-Based Model of Superior Returns
Resources Capability Action required: Locate an attractive industry.
Inputs to a firm’s Competitive production process. Capacity for an integrated set of resources to Advantage An Attractive integratively perform a Ability of aIndustry firm to task or activity. outperform its rivals Location of an industry with opportunities that can be exploited by the firm’s resources and capabilities
Ch1-23
Resource-Based Model of Superior Returns
Resources Capability Action required: Select strategy that best exploits resources and capabilities relative to opportunities in environs.
Inputs to a firm’s Competitive production process. Capacity for an integrated set of resources to Advantage An Attractive integratively perform a Ability of aIndustry firm to task or activity. outperform its rivalsStrategy Location of an industry Formulation with opportunities that and can be exploited by the Implementation firm’s resources and Strategic actions taken to capabilities earn above-average returns
Ch1-24
Resource-Based Model of Superior Returns
Resources Capability Action required: Maintain selected strategy in order to outperform industry rivals.
Inputs to a firm’s Competitive production process. Capacity for an integrated set of resources to Advantage An Attractive integratively perform a Ability of aIndustry firm to task or activity. outperform its rivalsStrategy Location of an industry Formulation with opportunities that and Superior Returns can be exploited by the Implementation firm’s resources and Strategic actions taken to Earning of abovecapabilities earn above-average average returns returns
Ch1-25
Resources and capabilities lead to Competitive Advantage when they are:
Valuable
allow the firm to exploit opportunities or neutralize threats in its external environment possessed by few, if any, current and potential competitors
Rare
Costly to Imitate when other firms either cannot obtain them
or must obtain them at a much higher cost
Nonsubstitutable the firm must be organized appropriately to
obtain the full benefits of the resources in order to realize a competitive advantage
Ch1-26
When these four criteria are met, Resources and Capabilities become:
Core Competencies
Core Competencies are resources and capabilities that can serve as a source of Competitive Advantage.
The Resource-Based model argues that Core Competencies are the basis for a firm’s Competitive Advantage, Strategic Competitiveness and Ability to Earn Above-average Returns.
Ch1-27
Strategic Intent
Winning competitive battles through deciding how to leverage internal resources, capabilities, and core competencies.
Strategic Mission
An application of strategic intent in terms of products to be offered and markets to be served.
Ch1-28
Strategic Intent
BUSINESS WEEKS’S 10 Top Managers of the Year, 1999
The most effective strategists provide a vision (strategic intent) to effectively elicit the help of others in creating a firm's competitive advantage.
Name Minoru Arakawa
Company Nintendo America
Strategic Accomplishment Scored huge hit by bringing Pok? mon to U.S. over objections of co-workers and negative market research From just 23 in Oct. ’98, LVMH’s U.S. shares have vaulted 280%, to about 87 Profits should jump 46%, to $2.3 billion for fiscal year 1999. Sales are expected to grow 25%, to $38 billion After his company was labeled racist, attracted minorities to key jobs, including treasurer Ira Hall, a former IBM executive Boosted stock price by around 100% last year, to about $54 Deals to broaden AOL’s availability and services will help boost income 102% this fiscal year, to $800 million Broadened Cisco into strategic businesses such as software, consulting, and fiber-optic communications Reduced internal conflicts and spurred growth through management changes Acquired rival French oil company ELF Aquitaine for $44 billion. Shares up about 35% in ’99, as profits expected to grow 20%, to $3.1 billion Turned toward more profitable data, Internet, and international operations
Bernard Arnault Arthur Blank
LVMH Home Depot
Peter Bijur
Texaco
Gordon Binder Steve Case
Amgen America Online
John Chambers
Cisco Systems
Jim Curvey Thierry Desmarest
Fidelity Investments Totalfina
Bernie Ebbers
MCI Worldcom
Ch1-29
Stakeholders:
Groups who are affected by a firm’s performance and who have claims on its wealth
The firm must maintain performance at an adequate level in order to maintain the participation of key stakeholders
Capital Market
Stock market/Investors Debt suppliers/Banks
Firm
Product Market
Primary Customers Suppliers
Organizational
Employees Managers Non-Managers
Ch1-30
Stakeholder Involvement
Each of the key stakeholders wants a piece of the same pie
1
How do you divide the pie in order to keep all of the stakeholders involved?
2
How do you increase the size of the pie so that there is more to go around?
Ch1-31
Strategic Inputs
Chapter 2 External Environment Strategic Intent Chapter 3 Internal Environment Strategic Mission
The Strategic Management Process
Strategy Implementation
Chapter 10 Corporate Governance
Chapter 12 Strategic Leadership Chapter 11 Structure & Control Chapter 13
Entrepreneurship
Strategy Formulation
Chapter 4 Business-Level Strategy Chapter 5 Competitive Dynamics Chapter 8 International Strategy Chapter 6 Corporate-Level Strategy Chapter 9 Cooperative Strategies
Strategic Actions
Chapter 7 Acquisitions & Restructuring
& Innovation
Outcomes
Strategic
Feedback
Strategic Competitiveness Above Average Returns
Ch1-32
doc_290124963.ppt
Strategic management analyzes the major initiatives taken by a company's top management on behalf of owners, involving resources and performance in internal and external environments.[1] It entails specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs.
Strategic Management and Strategic Competitiveness
Ch1-1
Strategic Competitiveness
Achieved when a firm successfully formulates and implements a value-creating strategy
Sustained Competitive Advantage
Occurs when a firm develops a strategy that competitors are not simultaneously implementing Provides benefits which current and potential competitors are unable to duplicate
Above-Average Returns
Returns in excess of what an investor expects to earn from other investments with similar risk
Ch1-2
The Strategic Management Process
Involves the full set of:
Commitments
Decisions
Actions
which are required for firms to achieve:
Strategic Competitiveness
Sustained Competitive Advantage Above-Average Returns
Ch1-3
Strategic Inputs
Chapter 2 External Environment Strategic Intent Chapter 3 Internal Environment Strategic Mission
The Strategic Management Process
Strategy Implementation
Chapter 10 Corporate Governance
Chapter 12 Strategic Leadership Chapter 11 Structure & Control Chapter 13
Entrepreneurship
Strategy Formulation
Chapter 4 Business-Level Strategy Chapter 5 Competitive Dynamics Chapter 8 International Strategy Chapter 6 Corporate-Level Strategy Chapter 9 Cooperative Strategies
Strategic Actions
Chapter 7 Acquisitions & Restructuring
& Innovation
Strategic Outcomes
Feedback
Strategic Competitiveness Above Average Returns
Ch1-4
Chapter One: Key Themes
Challenge of Strategic Management
Changing Competitive Landscape Two Models of Superior Profitability • Industrial Organization Model • Resource-Based Model Key Stakeholder Groups
Ch1-5
Challenge of Strategic Management
Only 16 of the 100 largest U.S. companies at the start of the 20th century are still identifiable today! In a recent year, 44,367 businesses filed for bankruptcy and many more U.S. businesses failed
Competitive success is transient...unless care is taken to preserve competitive position
Ch1-6
Challenge of Strategic Management
Best Stocks of the Decade
The goals of achieving strategic competitiveness and earning aboveaverage returns are challenging The performance of some companies more than meets strategic management's challenge
% Change 1990-99
Cisco AOL Dell EMC CMGI Solectron JDS Uniphase Tellabs Clear Channel Communications Best Buy Maxim Integrated Veritas Software Charles Schwab Microsoft Sun Microsystems Safeguard Scientifics Qlogic Yahoo Qualcomm Applied Materials
124,825% 81,400% 72,400% 68,314% 57,191% 21,233% 18,755% 16,921% 13,700% 9,376% 8,735% 8,536% 7,985% 7,483% 7,163% 6,816% 6,764% 6,744% 6,388% 6,350% Ch1-7
21st Century Competitive Landscape
Fundamental nature of competition is changing
• Rapid technological changes • Rapid technology diffusions • Dramatic changes in information and communication technologies • Increasing importance of knowledge
The pace of change is relentless.... and increasing Traditional industry boundaries are blurring, such as...
• Computers • Telecommunications
Ch1-8
21st Century Competitive Landscape
The global economy is changing
• People, goods, services and ideas move freely across geographic boundaries
Traditional sources of competitive advantage no longer guarantee success New keys to success include:
• • • • Flexibility Innovation Speed Integration
Ch1-9
• New opportunities emerge in multiple global markets
• Markets and industries become more internationalized
21st Century Competitive Landscape
A country’s competitiveness is achieved through the accumulation of individual firms’ strategic competitiveness in the global economy Achieving improved competitiveness allows a country's citizens to have a higher standard of living Country Competitiveness Rankings
1999 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 1998 1 3 2 6 5 8 10 4 7 11 15 14 13 12 9 17 16 30 23 20 18 19 22 27 24 25 Country Singapore United States Hong Kong Taiwan Canada Switzerland Luxembourg United Kingdom Netherlands Ireland Finland Australia New Zealand Japan Norway Malaysia Denmark Iceland Sweden Austria Chile Korea France Belgium Germany Spain Competitiveness Index 1999 2.12 1.58 1.41 1.38 1.33 1.27 1.25 1.17 1.13 1.11 1.11 1.04 10.1 1.00 0.92 0.86 0.85 0.59 0.58 0.37 0.57 0.46 0.44 0.39 0.37 0.16 Competitiveness Index 1998 2.16 1.41 1.91 1.19 1.27 1.10 1.05 1.29 1.13 1.05 0.70 0.79 0.84 0.97 1.09 0.59 0.61 -0.18 0.25 0.37 0.57 0.39 0.25 -0.03 0.15 0.02
Alternative Models of Superior Returns
Industrial Organization Model
The External Environment An Attractive Industry Strategy Formulation
Resource-Based Model
Resources Capability Competitive Advantage
Assets and Skills
Strategy Implementation Superior Returns
An Attractive Industry
Strategy Implementation
Superior Returns
Ch1-11
I/O Model of Superior Returns
The Industrial Organization model suggests that above-average returns for any firm are largely determined by characteristics outside the firm. This model largely focuses on industry structure or attractiveness of the external environment rather than internal characteristics of the firm.
Ch1-12
I/O Model of Superior Returns
External Environment
General Environment Industry Environment Competitive Environment
Action required: Study the external environment, especially the industry environment.
Ch1-13
I/O Model of Superior Returns
External Environment An Attractive GeneralIndustry Environment
Industry Environment An industry whose Competitive structural characteristics Environment suggest above-average returns are possible
Action required: Locate an industry with high potential for aboveaverage returns.
Ch1-14
I/O Model of Superior Returns
External Environment Attractive GeneralIndustry Environment Industry Environment Strategy An industry whose Formulation Competitive structural characteristics
Action required: Identify strategy called for by the industry to earn above-average returns.
Environment Selection of a strategy suggest above-average with abovereturns are linked possible average returns in a particular industry
Ch1-15
I/O Model of Superior Returns
Action required: External Develop or acquire assets Environment Attractive and skills needed to GeneralIndustry Environment implement the strategy. Strategy Industry Environment An industry whose Formulation Competitive structural characteristics Environment Assets and Skills Selection of a strategy suggest above-average
with abovereturns arelinked possible Assets and average returns in a skills required to implement particular industry a chosen strategy
Ch1-16
I/O Model of Superior Returns
Action required: External Use the firm’s strengths Environment Attractive (its assets or skills) to GeneralIndustry Environment implement the strategy. Strategy Industry Environment An industry whose Formulation Competitive structural characteristics Environment Assets and Skills Selection of a strategy suggest above-average
with abovereturns arelinked possible Assets and skills average returns in a Strategy required to implement Implementation particular industry a chosen strategy Selection of strategic actions linked with effective implementation of the chosen strategy
Ch1-17
I/O Model of Superior Returns
Action required: External Maintain selected strategy Environment Attractive in order to outperform GeneralIndustry Environment industry rivals. Strategy Industry Environment An industry whose Formulation Competitive structural characteristics Environment Assets and Skills Selection of a strategy suggest above-average
with abovereturns arelinked possible Assets and skills average returns in a Strategy required to implement Implementation particular industry Superior Returns a chosen strategy Selection of strategic actions linked with Earning of aboveeffective implementation average returns of the chosen strategy
Ch1-18
Resource-Based Model of Superior Returns
The Resource-Based model suggests that above-average returns for any firm are largely determined by characteristics inside the firm. This model focuses on developing or obtaining valuable resources and capabilities which are difficult or impossible for rivals to imitate.
Ch1-19
Resource-Based Model of Superior Returns
Resources
Inputs to a firm’s production process.
Action required: Identify firm resources. Study strengths and weaknesses relative to rivals.
Ch1-20
Resource-Based Model of Superior Returns
Resources Capability Action required: Determine what firm capabilities allow it to do better than rivals.
Inputs to a firm’s production process. Capacity for an integrated set of resources to perform a task or activity.
Ch1-21
Resource-Based Model of Superior Returns
Resources Capability Action required: Determine how firm’s resources and capabilities may create competitive advantage.
Inputs to a firm’s Competitive production process. Capacity for an integrated set of resources to Advantage integratively perform a Ability of a firm to task or activity. outperform its rivals
Ch1-22
Resource-Based Model of Superior Returns
Resources Capability Action required: Locate an attractive industry.
Inputs to a firm’s Competitive production process. Capacity for an integrated set of resources to Advantage An Attractive integratively perform a Ability of aIndustry firm to task or activity. outperform its rivals Location of an industry with opportunities that can be exploited by the firm’s resources and capabilities
Ch1-23
Resource-Based Model of Superior Returns
Resources Capability Action required: Select strategy that best exploits resources and capabilities relative to opportunities in environs.
Inputs to a firm’s Competitive production process. Capacity for an integrated set of resources to Advantage An Attractive integratively perform a Ability of aIndustry firm to task or activity. outperform its rivalsStrategy Location of an industry Formulation with opportunities that and can be exploited by the Implementation firm’s resources and Strategic actions taken to capabilities earn above-average returns
Ch1-24
Resource-Based Model of Superior Returns
Resources Capability Action required: Maintain selected strategy in order to outperform industry rivals.
Inputs to a firm’s Competitive production process. Capacity for an integrated set of resources to Advantage An Attractive integratively perform a Ability of aIndustry firm to task or activity. outperform its rivalsStrategy Location of an industry Formulation with opportunities that and Superior Returns can be exploited by the Implementation firm’s resources and Strategic actions taken to Earning of abovecapabilities earn above-average average returns returns
Ch1-25
Resources and capabilities lead to Competitive Advantage when they are:
Valuable
allow the firm to exploit opportunities or neutralize threats in its external environment possessed by few, if any, current and potential competitors
Rare
Costly to Imitate when other firms either cannot obtain them
or must obtain them at a much higher cost
Nonsubstitutable the firm must be organized appropriately to
obtain the full benefits of the resources in order to realize a competitive advantage
Ch1-26
When these four criteria are met, Resources and Capabilities become:
Core Competencies
Core Competencies are resources and capabilities that can serve as a source of Competitive Advantage.
The Resource-Based model argues that Core Competencies are the basis for a firm’s Competitive Advantage, Strategic Competitiveness and Ability to Earn Above-average Returns.
Ch1-27
Strategic Intent
Winning competitive battles through deciding how to leverage internal resources, capabilities, and core competencies.
Strategic Mission
An application of strategic intent in terms of products to be offered and markets to be served.
Ch1-28
Strategic Intent
BUSINESS WEEKS’S 10 Top Managers of the Year, 1999
The most effective strategists provide a vision (strategic intent) to effectively elicit the help of others in creating a firm's competitive advantage.
Name Minoru Arakawa
Company Nintendo America
Strategic Accomplishment Scored huge hit by bringing Pok? mon to U.S. over objections of co-workers and negative market research From just 23 in Oct. ’98, LVMH’s U.S. shares have vaulted 280%, to about 87 Profits should jump 46%, to $2.3 billion for fiscal year 1999. Sales are expected to grow 25%, to $38 billion After his company was labeled racist, attracted minorities to key jobs, including treasurer Ira Hall, a former IBM executive Boosted stock price by around 100% last year, to about $54 Deals to broaden AOL’s availability and services will help boost income 102% this fiscal year, to $800 million Broadened Cisco into strategic businesses such as software, consulting, and fiber-optic communications Reduced internal conflicts and spurred growth through management changes Acquired rival French oil company ELF Aquitaine for $44 billion. Shares up about 35% in ’99, as profits expected to grow 20%, to $3.1 billion Turned toward more profitable data, Internet, and international operations
Bernard Arnault Arthur Blank
LVMH Home Depot
Peter Bijur
Texaco
Gordon Binder Steve Case
Amgen America Online
John Chambers
Cisco Systems
Jim Curvey Thierry Desmarest
Fidelity Investments Totalfina
Bernie Ebbers
MCI Worldcom
Ch1-29
Stakeholders:
Groups who are affected by a firm’s performance and who have claims on its wealth
The firm must maintain performance at an adequate level in order to maintain the participation of key stakeholders
Capital Market
Stock market/Investors Debt suppliers/Banks
Firm
Product Market
Primary Customers Suppliers
Organizational
Employees Managers Non-Managers
Ch1-30
Stakeholder Involvement
Each of the key stakeholders wants a piece of the same pie
1
How do you divide the pie in order to keep all of the stakeholders involved?
2
How do you increase the size of the pie so that there is more to go around?
Ch1-31
Strategic Inputs
Chapter 2 External Environment Strategic Intent Chapter 3 Internal Environment Strategic Mission
The Strategic Management Process
Strategy Implementation
Chapter 10 Corporate Governance
Chapter 12 Strategic Leadership Chapter 11 Structure & Control Chapter 13
Entrepreneurship
Strategy Formulation
Chapter 4 Business-Level Strategy Chapter 5 Competitive Dynamics Chapter 8 International Strategy Chapter 6 Corporate-Level Strategy Chapter 9 Cooperative Strategies
Strategic Actions
Chapter 7 Acquisitions & Restructuring
& Innovation
Outcomes
Strategic
Feedback
Strategic Competitiveness Above Average Returns
Ch1-32
doc_290124963.ppt