Professional Documents
Culture Documents
Slides Theme 08
Slides Theme 08
Videos 87-104
1
Strategic Management
Strategy is an action plan that synchronizes the tangible and intangible resources and for achieving a set target for
superior performance.
Strategic Management is a branch of management. It is essential for managing organizational tangible and intangible resources
to achieve its long term and short term goals and objective for sustainable competitive advantage in industry.
3 Main phases of Strategic Management
Strategic Management & Entrepreneurship Over lappings
1. Strategy formulation
2. Strategy implementation Creation & growth, Diversification, Performance of firms, Industry
3. Strategy evaluation and control
dynamics, Competitive advantage, Product ecosystems,
Entrepreneurship MGT602 2
Theme 08 Video 87 Strategic management in entrepreneurship
Strategic Planning Process
External
environmental
scanning
(opportunity
seeking)
Vision and
Objective Measure and
mission Strategies
Development Implementation evaluation
statement evaluation (execution plan)
(Business action (business
(Business (execution plan)
plan) performance)
Description)
Internal
environmental
scanning
(resources in hand
and
personal
investment)
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01 Video 88 Strategic Management Process
Theme 08
Vision & Mission
What is your business?
A mission statement outlines the company’s business, objectives and its approach to reach those objectives.
What do we want to become?
Generally, vision statement defines the anticipated future orientation of the business venture.
Characteristics of good vision & mission statement Benefits of Vision and Mission Statements
1. Philosophy 1. Brings unanimity of purpose and direction among strategic partners
2. Aligned vision and mission statement (owner and employees)
3. Customer orientation 2. Provide standards and procedures for execution plan
4. Market 3. Bring focus in allocation of resources
5. Technology 4. Establish a culture and tone of your venture
6. Competitive Advantage 5. Serve as a direction and quality standard
7. Concern for society 6. Set rule to deter those strategic partners who cannot from
8. Concern for employees participate for further growth
9. Future orientation 7.Facilitate in translating the long-term and short-term goals and
objectives into a work structure
8. Motivates for future growth
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Theme 08
01 Video 89 Clear Vision and mission of business venture
The Internal Assessments
Strengths are the positive internal factors that a business venture can
use to achieve its vision, mission, goals and objectives. Internal Audit (self-assessment check list example)
Weaknesses are the negative internal factors that inhibit the business o Am I clear about my destination ?
venture’s capability to achieve its vision, mission, goals and objectives. o Are my skills sufficient for kick start or growth?
It adversely affect the sustainable competitive advantage of a venture. o What are my limitations ?
o In which area I am lacking that could adversely/positively
affect my venture establishment or growth?
o Is my network worthy for establishment/growth?
o What level of commitment I can bring in my venture ?
Internal Audit (Venture assessment check list example)
o 1. Is venture’s objectives and goals measurable ?
o 2. Is venture’s objectives and goals well communicated to strategic partners?
o 3. Is product/service design competitive?
Tools for internal audit (strength and weakness) o 4. Is selected target market is well thought and planned ?
o 5. Is my pricing strategy competitive?
ü Cost/Benefit Analysis o 6. Are my unique selling proposition well communicated to target market?
ü Financial Ratios o 7. Is customer orientation well crafted?
ü Production and operation assessment o 8. Is the venture’s structure appropriate?
o 9. Are jobs and requirements clear to all strategic partners?
o 10. Is strategic partners morale high?
o 11. Are employee’s absenteeism and/or turnover low?
o 12. Are reward and control mechanisms effective?
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Theme 08 Video 90 Assessment of strength and weakness of yourself and venture
The External Assessments
Opportunities are potential options available in the external environment that a venture/entrepreneur can exploit
to achieve its vision, mission, goals and objectives
Threats are negative forces available in the external environment that inhibit the business venture’s capability to achieve its
vision, mission, goals and objectives. Broad categories of external forces
§ Economic forces
§ Social, cultural and demographic forces
§ Natural environment forces
§ Political and governmental forces
§ Legal forces
§ Technological forces
§ Competitive forces
§ Sources of External Information
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Theme 08 Video 91.Scan environment for potential opportunities and threats
Business Goals and Objectives
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Theme 08 Video 92 Create short term and long term goals and objectives
The selection of appropriate strategy
Cost leadership strategy: A strategy in which an entrepreneur strives to be low-cost producer relative to its competitors in the
industry. It involves mass production, quality compromise, or technological break through.
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Theme 08 Video 95 Analyze competition
Criteria for Evaluating Strategies
Consistency: Astrategy should not present inconsistent goals and policies.
Consonance: refers to the need for strategists to examine sets of trends adaptive response to the external environment.
Feasibility: Physical, human, and financial resources of the enterprise
Advantage: maintenance of a competitive advantage
Strategy Evaluation Checklist
ü Competitors reaction to strategies
ü Competitors’ strategies change
ü Competitors’ strengths and weaknesses change
ü Competitors strategic changes and success
ü Competitors satisfaction with their present market positions and profitability
Financial Review
ü Return on investment (ROI)
ü Return on equity (ROE)
ü Profit margin
ü Market share
ü Debt to equity ration
ü Earnings per share
ü Sales growth
ü Asset growth
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Theme 08 Video 96 Strategy review, evaluation and control
Blue Ocean Strategy
How to create uncontested market space and make the competition irrelevant?
What is Red Ocean Strategy?
Align the whole system of a strategic firm's activities with its choice of differentiation or low cost.
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Theme 08 Video 97 Innovation logic: the blue ocean strategy (Part 1)
Value Innovation: The cornerstone of Blue Ocean Strategy
Value-cost trade-off (Conventional Believe)
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Theme 08 Video 98 Innovation logic: the blue ocean strategy (Part 2)
Blue Ocean Strategy Logic Explained.....
BOS Logic 1: Reconstruct market boundaries
Boundaries of Competition Head-to-Head Competition Creating New Market Space
Industry Focuses on rivals within its industry Looks across alternative industries
Buyer Group Focuses on better serving the buyer group Redefines the buyer group of the industry
Scope of Product and Service Focuses on maximizing the value of product and Looks across to complementary product and service
Offerings service offerings within the bounds of its industry offerings that go beyond the bounds of its industry
Functional-emotional Focuses on improving price-performance with the Rethinks the functional-emotional orientation of its
Orientation of an Industry functional or emotional orientation of this industry industry
Time/Trends Focuses on adapting to external trends as they occur Participation in shaping external trends over time
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Theme 08 Video 99 Innovation logic: the blue ocean strategy (Part 3)
Blue Ocean Strategy Logic Explained.....
BOS Logic 2: Reach Beyond Existing Demand
1. Focus on existing customers.
2. Drive for finer segmentation to accommodate buyer differences.
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Theme 08 Video 99 Innovation logic: the blue ocean strategy (Part 3)
Group Discussions and Interviews
Group Discussion 1: The interview with an entrepreneur 1: How to lead the competition or making competition irrelevant?
Group Discussion 5:The interview with an entrepreneur 2: What are the challenges of online businesses?
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Theme 08 Video 100,101,102,103,104