Chapter 1 Notes

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Management (MGS)
Professor Constantinou

Chapter 1 Introducing Strategic Management NotesThree Overarching Themesthree themes that are critical to developing competency in the field of strategic management are1firms and industries are dynamic in nature2to succeed the formulation of a good strategy and its implementation should be inextricably connected3strategic leadership is essential if a firm is to both formulate and implement strategies that create valueWhat is Strategic Managementstrategic management is the process by which a firm manages the formulation and implementation of its strategyThe Strategic Leaders Perspectivein the business context the idea of strategy suggests a bigpicture perspective on the firm and its contextthis holistic view of the organization is called the strategic leaders perspectivein business settings a strategy is of little use if it is not wellexecuted by line managersa good leader cant afford to devise a strategy in isolation from the lowerlevel leaders who are responsible for executing itthe strategic leaders perspective is the holistic consideration of the business and its environment rather than the myopic focus on a single functional areaWhat is Strategystrategy is the coordinated means by which an organization pursues its goals and objectivesa strategy thus encompasses the patterns of actions that have been taken and those that are planned to be taken by an organization in pursuing its objectivesStrategic AnalysisInternalBusiness Strategy versus Corporate StrategyExternalbusiness strategy refers to the ways a firm goes about achieving its objectives within a particular industry or industry segmentbusiness strategy focuses on achieving a firms objectives within a particular business linetwo critical questions that business strategy must address are 1 how the firm will achieve its objectives today when other companies may be competing to satisfy the same customers needs and 2 how the firm plans to compete in the futurecorporate strategy addresses issues related to three fundamental questions associated with managing a company that operates in more than one business1In what business will we compete2How can we as a corporate parent add value to our various lines of business3How will diversification or our entry into a new industry help us to compete in our other industriesStrategy Formulation and Implementationstrategy formulation is the process of dividing what to do strategy implementation is the process of performing all the activities necessary to do what has been plannedbecause neither can succeed without the other the two processes are iterative and interdependent from the standpoint that implementation should provide information that is used to periodically modify business and corporate strategyStrategy FormulationArenas Where will we be active and wit
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