Strategic Management Slide Good One

8/3/2019 Strategic Management Slide Good One

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Why and How


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What is strategy ?

It is a plan for achieving purpose

Concept of strategy in military in the time of

ancient Greeks.Spread to diplomatic and business contexts.

St rategy results from careful analysis

Strategies may change according to

environmental changes so IS developmentsthat supported them may ended in such cases.


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The process of specifyingan organization's object ivesdeveloping policies and plans to

achieve these objectivesallocating resources so as toimplement the plansIt is the highest level of managerialactivity, usually performed by the

company's Chief Executive Officer(CEO) and executive team.


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Strategic planning is a way toidentify and move toward desired

future states.It is the process of developing andimplementing plans to reach goalsand objectives.


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Clear goals: Helps making to tact ical choicesmade during the lifetime of the strategy.

Supports init iat ive: Rewarding initiativebehavior results in bett er comm itment andmotivation.

Concentrated : Resources and energy isconcentrated when and where it matters most.

Flexible : Taking advantage of chages.

W ell managed : Good leadership is needed.


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When developing a strategy

I nvestigate the situat ion

Develop some alternative courses of actionEvaluate these decisions

Choose the decision to be implemented

Implement our decision and follow it

By using this process we can develop a model ofstrategic managment.


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There are many analytical tools to help in this

process; most of which are concerned withoffering ways of analysing the currentsituation. Those we examine are;

SWOT

PESTEL

Balanced Business Scorecard

Boston Group Matrix


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A SWOT Analysis is a strategic planningtool used to evaluate the

Strengths

W eaknesses

Opportunities

Threats

involved in a project or in a businessventure.


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I t m easures a business unit, aproposition or idea.

There are internal factorsstrengths and weaknesses from internalfactors

opportunities & threats from externalfactors.

It helps in decision making how the f irm mayuse its st rengths and opport unit ies toovercome weaknesses and threats.


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performed early in the projectdevelopment process

helps organizations evaluate theenvironmental factors

internal situation

facing a project.


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Strengths and w eaknesses areattributes that measure your

internal capability.Opportunit ies and threats refer to

how the external environmentseffects your team / business/ group.


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Examples of Possible Strengths

and W eak nesses

Experience

Resources

PatentsGood reputation

Originality

Customer Service

EfficiencyCompetitive Advantages


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Examples of Possible

Opportunities and ThreatsBusiness Alliances

New Products and/ or Services

Increasing Market SaturationTargeting a New Market Segment

Locating a New Source of Revenue

Unfulfilled customer need


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SWOT analysis can help in turningweaknesses and threats into

opportunities, and ultimately intostrengths.


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Figure 2.3 A SWOT matrix


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SWOT example

Strengths

End-user sales control anddirection.

Right products, quality andreliability.

Better product life anddurability.

Spare manufacturing capacity.

Some staff have experience of

end-user sector.

Have customer lists.

Direct delivery capability.

Product innovations ongoing.

The scenario is based on a business-to-business manufacturing company, whohistorically rely on distributors to take their products to the end user market. Themanufacturer tries to create a new company of its own to distribute its products direct

to certain end-user sectors, which are not being covered or developed by its normaldistributors.

Weaknesses

We would be a small player.

No direct marketing experience.

We cannot supply end-users

abroad.Need more sales people.

Limited budget.

No pilot or trial done yet.

Delivery-staff need training.

Customer service staff needtraining.


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Opportunities

Could develop new products.

Profit margins will be good.

End-users respond to new ideas.

Could extend to overseas.

New specialist applications.

Can surprise competitors.

SWOT example (cont.)

Threats

Environmental effects would favour larger

competitors.

Existing core business distribution risk.Market demand very seasonal.

Retention of key staff critical.

Possible negative publicity.

Vulnerable to reactive attack by major

competitors.


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1. SO STRATEGIESThese strategies are based on institutional strengths to take

advantage of market opportunities.

2. WO STRATEGIES

These strategies are based on overcoming institutionalweaknesses to take advantage of market opportunities.

3. ST STRATEGIESThese strategies are based on institutional strengths to avoid

market threats.

4. WT STRATEGIESThese strategies are based on overcoming/minimizing

institutional weaknesses to avoid market threats.


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It is describing the external factors of

Political

Economic

Socio-cultural

Technological

Environmental and

Legal that affect organization now or in the future.

We need to be aware of external factorsaffecting our organization and how they mightchange IS development s.


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Government attitudes towardsprivate and state-owned enterprises

international politics (price of oil, raw

material supply)

Economic : Interest rates, currencyexchange, inflation, market share etc.

Socio-cultural : Changes in demography,life style, working conditions, educationetc.


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Technological : New ways of delivering aservice through the use of technology,exploit marketing information and extendchoices by internet etc.

Environmental : Climate change, impactof pollution, raw material supplies, useof energy etc.

Legal : Anti-trust and monopolylegislation, laws against pollution,specific taxation legislations etc.


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Addresses intangible aspects

customer perspectivethe internal business perspective

employee perspective


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Customer PerspectiveHow customers see the organization?

Measures

response and delivery times

defect ratesFollowup service

Customers are surveyed to find out what itis like to be a customer of ourorganization.


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How well our business isrunning ?

What processes must workexcellently if we are to exceedour customers expectations ?


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Oft en called the learning andgrowth or organizational

growth perspect ive .Constant development of

employees

Much more than just training.


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Robson s analysis of I S opportunities3 generic business strategies to respond

to the five competitive forces by usingI S to

reduce overall costs

differentiate products and services fromthe competition s offerings and addadditional features on them

concentrate on market segments andsupport activities in them.


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Robson s analysis of IS opportunit ies

Figure 2.6 Robson s analysis of the five forces and IS opportunities

Source:W Robson, Strategic Management & Information Systems, 2nd edn, Prentice Hall, 1997


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Generic IS strategies for organizations

There are six strategies offered for thedevelopment of IS in organizations byGregory Parsons. These are;

1.Centrally planned where the planning cyclesfor businesses and IS are closely linked and ISstrategy is embedded in business strategy.

2. Leading edge where there is a belief thatinnovative technology can create organizational

gains and that risky investment can generatebig paybacks.


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Generic IS strategies for organizations (cont.)

3. A free market users make decisions so ISdepartment behaves as a competitive businessunit.

4. Monopoly the information is a corporate assetand strategy for IS development is founded onit. There is a danger of slow moving andunresponsive to customer.

5. Scarce resource scope of the IS function isdeliberately limited by budget constraints.

6. Necessary evil where organizations see thedevelopment of IS as a necessary evil andbelieve the information is not important to theirbusiness.


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How strategy and systems link withorganizat ional culture, the 7-S model

It proposes that there are other factors inaddition to strategy that make an organizationeffective.


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The 3Ss across the top of the model are described as 'HardSs':

Strategy: the direction and scope of the company overthe long term.

Structure: the basic organization of the company, itsdepartments, reporting lines, areas of expertise andresponsibility (and how they inter-relate).

Systems: formal and informal procedures that governeveryday activity, covering everything from managementinformation systems, through to the systems at the pointof contact with the customer (retail systems, call centersystems, online systems, etc).


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The 4Ss across the bottom of the model are less tangible,more cultural in nature, and were termed 'Soft Ss' byMcKinsey:

Skills: the capabilities and competencies that exist withinthe company. What it does best.

Shared values: the values and beliefs of the company.Ultimately they guide employees towards 'valued'behavior.

Staff: the company's people resources and how the aredeveloped, trained and motivated.

Style: the leadership approach of top management andthe company's overall operating approach.


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Effective organizations achieve a fit between these sevenelements.

If one element changes then this will affect all the others. For

example, a change in HR-systems like internal career plansand management training will have an impact onorganizational culture (management style) and thus will affectstructures, processes, and finally characteristic competences

of the organization.

The soft factors can make or break a successful change

process, since new structures and strategies are difficult tobuild upon inappropriate cultures and values.


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Thank you for participating.

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Strategic Management Slide Good One