Strategic Management

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Fact Box
Module Foundations and Principles II
Course
representatives
Jan Karpe
Credits 3
Term Term 1
Course is required
Current course page Summer 2017
Active Yes


Concept / Big picture

The growing importance of strategic management is a result of several persisting megatrends: Modern and cheaper communication and transportation have led to increasing global trade and awareness. Product life cycles have become much shorter. Furthermore, the Web has led to increasing competition in most industries, which, for some companies, has made it difficult to compete.

It is evident that traditional management concepts must adapt to the continuously evolving demands of and trends in a Web-based environment. A modern strategic management approach includes an analysis of strategic resources, skills, abilities and core competencies. The crucial topics of such an approach are the sources of competitive advantages. Crucial resources are the best adapting of the organization to its environment, the possession of resources, skills and abilities that are valuable, rare and difficult to imitate by competitors, superior linkages ('Virtual Networks') with stakeholders leading to trust, goodwill, reduced uncertainty and improved business dealings. This course deals with these essential topics and concepts of modern Strategic Management.

During the introduction to the course, students will get to know the megatrends and challenges enterprises face as a result of the proliferation of the Web and the Social Media. After a brief overview of central definitions, students will be exposed to the most important classical concepts and tools of strategic management like the 4-C Concept, PEST Analysis, Porter's Five Forces Model, the SWOT Analysis.

Intended Learning Outcomes

Students will become familiar with the crucial skills and concepts of modern Strategic Management.

Therefore, the students will be able to:

  • name the crucial objectives, cost and limits of planning an rationality.
  • describe the essential strategic challenges resulting from the Web (= Web Megatrends) and socio-economic factors.
  • identify the probable effects from the Megatrens onto the strategic management process.
  • describe the key elements in the strategic management process.
  • explain the differences between strategic thinking and strategic planning as well as those between strategic and operative management.
  • demonstrate an understanding of theory and research related to strategic management in search for advantages of competition.
  • discuss objectives, resources and tools of strategic management.
  • define the characteristics of global web player.
  • examine crucial strategic management concepts esp. SWOT Analysis, 4 C Concept, PEST Analysis, 5-Forces Concept.
  • develop and discuss strategic concepts for the global web player like Amazon, Apple, Facebook, Google and Microsoft.
  • understand strategy formulation at the corporate, business, and functional levels.

Structure of the Course

Introduction

Strategic management is a systems approach of identifying and making the necessary changes and measuring the organization’s performance as it moves toward its vision.[1] Therefore strategic management hinges upon answering five key questions:

1. Mission Statement and Objectives: What is the mission of the enterprise? And what are the business’ objectives?

2. Internal Situation: Where are we now? What are our strategic business fields, revenues, profits and markeit shares

3. External Situation: How about our business' environment? What is the relevant market, how is the market growth and who are our competitors?

4. Strategic Analysis: Strategic Tools and Instruments: What are the best ways to achieve our objectives? How can the business be successful and competitive on a long-term basis? Which human and strategic resources are required to make that happen?

5. Future Outlook: How is it possible to be successful and competitive in the future?

To answer these questions it makes sense to argue along these questions in the strategic management process.

Mission Statement and Objectives

A company's mission is its reason for being. The mission statement lkeads to the business goals and guides strategic formulation in the company. The mission is often expressed in the form of a mission statement, which conveys a sense of purpose to employees and projects a company image to customers since it summarizes the goals and purposes of the enterprise in terms easily understood by all (internal and external) stakeholders. In the strategy formulation process, the mission statement sets the mood of where the company should go. Depending on the socio-economic and technological development, different goals might be in focus, e.g. growth, increase in flexibility, risk reduction, handling of complexity and utilization of synergies. Objectives are concrete goals that the organization seeks to reach, for example, an earnings growth target. The objectives should be SMART: specific, measurable, achievable, realistic and terminated. It is because the company can monitor its progress and make corrections as needed.

Situation Analysis (Internal and external situation)

Once the firm has specified its objectives, it devises a strategic plan to reach those objectives. For theis strategic plan the company has to now the current (market) situation.

The situation analysis is inevitable to identify know the standing of the enterprise and a basic knowledge for its strengths and weaknesses. The firm must know its own capabilities and limitations in order to select the opportunities that it can pursue with a higher probability of success. The situation analysis therefore involves an analysis of both the external and internal environment. The internal analysis is about revenues, profits, market shares and strategic business fields of the company. A crucial point is the business model. The external analysis deals with the environment like the relevant market, market growth and the main competitors on these markets.

Strategy Analysis (Strategic Tools & Measures)

Every concept for strategic management needs suitable tools for the analysis. In this course we will apply essential tools for the strategic analysis. The tools that can be used are: the Generic Strategy Concept, the Product Life Cycle, the Portfolio Concept, the 4 C-Concept , the SWOT Analysis, the PEST analysis and Porter’s Five Forces Model. While the four first-metnioned concepts will be explained in the first online meeting, here is a short overview of the last-mentioned three concepts:

1. The SWOT Analysis is almost certainly the most basic of all the strategy analysis tools and techniques. The SWOT Analysis is a useful technique for understanding the firm's strengths and weaknesses, and for identifying both the opportunities and the threats the firm faces. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable objectives. Used in a business context, a SWOT Analysis helps to carve a sustainable niche in the relevant market. Used in a personal context, it helps to develop a way that takes best advantage of your talents, abilities and opportunities. [2]

2. A very similar tool is the PEST analysis. This macro-environmental analysis includes political, economic, social, and technological factors. It is often termed a macro-scanning tool as it involves looking a the the big picture long-term changes in the environment. A PEST analysis explores the threats and opportunities a firm faces as a result of the Political, Economic, Social and Technological changes occurring in its competitive environment. The Political perspective includes any government, parastatal and special interest group actions or lobbying in the form of policy, taxes and duties, laws, lawsuits and regulations. It is important to understand the political agenda and how it might move for or against certain industries or practices. The Economic view includes the general economic environment and the effects that this might have on customer, distributors and suppliers. Factors, to consider might include indicators such as GDP, inflation, interest rates, stock market conditions, disposable income, and employment, in aggregate or on a sector specific basis. Internationally, you might also consider import/export conditions, foreign exchange conditions, and trade deficits/surpluses. In conducting your analysis, it is important to distinguish between long terms trends and structural issues, and seasonal or cyclical issues. The Social issue considers changes in social preferences and norms. These could be driven by demographic changes such as population aging, changes in family size and dynamics, immigration and emigration, and changes to ethnic and/or religious views and norms. The Technological perspective considers the impact of all form of technological development and innovation. This could include manufacturing, production and transportation technologies, as well as the use of technology in coordinating and communicating activities both upstream and downstream in the supply chain. The development of information technologies, including the internet and associated technologies such as mobile access is obviously a major factor here. The PEST analysis headings are a framework for reviewing a situation, and can be used to review a strategy or position, direction of a company, a marketing proposition, or idea. Completing a PEST analysis is very simple, and is a good subject for workshop sessions. It works well in brainstorming meetings, too. PEST analysis is used for business and strategic planning, marketing planning, business and product development and research reports. As PEST factors are essentially external, completing a PEST analysis is helpful prior to completing a SWOT analysis. [3]

3. Michael Porter devised a Five Forces Model which is also a useful tool for a situation analysis. Under each of its main headings, this model suggests points by which a competitive position can be analyzed broadly and sophisticatedly. This might be used when creating strategy and plans, or making investment decisions about a business or organization. Porter's five forces include (1) existing competitive rivalry between suppliers, (2) threats of new market entrants, (3) bargaining power of buyers (4) power of suppliers and (5) threat of substitute products (including technology change). Porter's Five Forces Model can be used to good analytical effects alongside other models such as the SWOT and PEST analysis tools. [4]

Strategy Implementation and Future Outlook

The strategy will most likely be expressed in high-level conceptual terms and priorities. For effective implementation, it needs to be translated into more detailed policies that can be understood at the functional level of the organization. The expression of the strategy in terms of functional policies also serves to highlight any practical issues that might not have been visible at a higher level. The strategy should be translated into specific policies for functional areas like marketing, production and human resources.

Once implemented, the results of the strategy need to be measured and evaluated, with changes made as required to keep the plan on track. Control systems should be developped and implemented to facilitate this monitoring. Standards of performance are set, the actual performance measured, and appropriate action taken to ensure success.

Global Web Player, the Big Five and Readings

This course analyses the strategic managment concepts of the Global Web Players. These are in detail: Amazon; Apple; Dell; Ebay; Facebook; Google; IBM; Intel; Lenovo; Microsoft; Nintendo; Oracle; Samsung; Sony; Twitter or Uber. A special focus is on the 'Big Five' of web companies Amazon, Apple, Facebook, Google and Microsoft. The readings for the strategic management concepts of the Big Five are:

Amazon:

Lawrence Gregory (2016): Amazon Inc. Vision Statement & Mission Statement http://panmore.com/amazon-com-inc-vision-statement-mission-statement-analysis

Nathaniel Smithson (2016): : Amazon Inc. Generic Strategy, Intensive Growth Strategies http://panmore.com/amazon-com-inc-generic-strategy-intensive-growth-strategies

Roberta Greenspan (2016): Amazon Inc. Five Forces Analysis & Recommendations (Porter’s Model) http://panmore.com/amazon-com-inc-five-forces-analysis-recommendations-porters-model

Roberta Greenspan (2016): Amazon Inc. SWOT Analysis & Recommendations http://panmore.com/amazon-com-inc-swot-analysis-recommendations

Roberta Greenspan (2016): Amazon.com Inc. PESTEL/PESTLE Analysis, Recommendations http://panmore.com/amazon-com-inc-pestel-pestle-analysis-recommendations

Apple:

Chistine Rowland (2015): Apple’s Vision Statement & Mission Statement http://panmore.com/apple-mission-statement-vision-statement

Pauline Meyer (2016): Apple’s Generic Strategy & Intensive Growth Strategies http://panmore.com/apple-inc-generic-strategy-intensive-growth-strategies

Deward Ferguson (2016): Apple Inc. Five Forces Analysis (Porter’s Model) http://panmore.com/apple-inc-five-forces-analysis-porters-model-case-study

Nathaniel Smithson (2015): Apple Inc. SWOT Analysis & Recommendations http://panmore.com/apple-inc-swot-analysis-recommendations

Jessica Lomabardo (2016): Apple Inc. PESTEL/PESTLE Analysis & Recommendations http://panmore.com/apple-inc-pestel-pestle-analysis-recommendations

Nathaniel Smithson (2016): Facebook Inc.’s Vision Statement & Mission Statement http://panmore.com/facebook-inc-vision-statement-mission-statement

Facebook:

Roberta Greenspan (2016): Facebook Inc. Generic Strategy, Intensive Growth Strategies http://panmore.com/facebook-inc-generic-strategy-intensive-growth-strategies

Justin Young (2016): Facebook Inc. Five Forces Analysis & Recommendations (Porter’s Model) http://panmore.com/facebook-inc-five-forces-analysis-recommendations-porters-model

Justin Young (2016): Facebook Inc. SWOT Analysis & Recommendations http://panmore.com/facebook-inc-swot-analysis-recommendations

Justin Young (2016): Facebook Inc. PESTEL/PESTLE Analysis, Recommendations http://panmore.com/facebook-inc-pestel-pestle-analysis-recommendations

Google:

Andrew Thompson (2016): Google’s Vision Statement & Mission Statement http://panmore.com/google-vision-statement-mission-statement

Andrew Thompson (2016): Google’s Generic Strategy & Intensive Growth Strategies http://panmore.com/google-generic-strategy-intensive-growth-strategies

Nathaniel Smithson (2016): Google: Five Forces Analysis (Porter’s Model) http://panmore.com/google-five-forces-analysis-porters-model

Andrew Thompson (2016): Google’s SWOT Analysis & Recommendations http://panmore.com/google-swot-analysis-recommendations

Christine Rowland (2016): Google PESTEL/PESTLE Analysis & Recommendations http://panmore.com/google-pestel-pestle-analysis-recommendations

Microsoft:

Lawrence Gregory (2016): Microsoft Corporation’s Vision Statement & Mission Statement http://panmore.com/microsoft-corporation-vision-statement-mission-statement-analysis

Lawrence Gregory (2016): Microsoft Corporation’s Generic & Intensive Growth Strategies http://panmore.com/microsoft-corporation-generic-strategy-intensive-growth-strategies

Edward Ferguson (2016): Microsoft Corporation’s Five Forces Analysis (Porter’s Model) & Recommendations http://panmore.com/microsoft-corporation-five-forces-analysis-porters-recommendations

Edward Ferguson (2016): Microsoft Corporation’s SWOT Analysis & Recommendations http://panmore.com/microsoft-corporation-swot-analysis-recommendations

Edward Ferguson (2016): Microsoft Corporation’s PESTEL/PESTLE Analysis & Recommendations http://panmore.com/microsoft-corporation-pestel-pestle-analysis-recommendations

Didactic Concept, Schedule and Assignments

The course focus is based on a blended learning concept that combines on site lessons, online workshops and home working. It is mainly built upon two on site sessions and three online workshops. After a first introductory workshop on site, the online workshops deal with the self-developped concepts of modern strategic management. The online workshops are presented in a highly interactive manner, open questions are discussed with the lecturer and among the students and current issues can be addressed.

Introductory lesson on site

This first session will clarify organizational course details as well as address the first chapters dedicated to explain basic definitions to the strategic management process as well as informational foundations regarding the basics of strategic management theory and modern management concepts and tools. Questions like: 'How to gain a competitive edge over rivals?', 'What is the distinctive competency and the unique strategic positioning that contributes to competitive advantage?', 'What strategies should we use to answer the challenges posed by Web 2.0?', 'How to sustain competitive advantages in a dynamic surrounding?' can be addressed through suitable and current case studies.

Before the students work on the case studies, there is a general introduction on how to deal with case studies. Afterwards the students have to choose different tasks to elaborate on a topic or case study. They have to develop a strategic management concept, present their results and discuss learnings with others in the following online workshops.

1st Online Workshop

The first workshop deals with the foundations of Strategic Management which includes some fundamental contents about planning, rationality and operative/strategic management by the lecturer. Furthermore the strategic management process will be explained by the lecturer. Hereinafter the crucial socioeconomic megatrends, value changes and web developments and its effects on the markets and the web will be discussed. The session close with an explaination of the main strategic principles, methods and tools.

2nd Online Workshop

In the second phase, selected students are asked to present their strategic analysis concepts of the global web player. The presentations will be critically discussed. The presentation should contain a description and evaluation of global web players' strategies. Thew following aspects shoud be considered:

1. Strategic Challenges: Relevant (Web) Megatrends

2. Strategic focus: Mission Statement and Objectives

3. Internal Situation Analysis (Enterprise): Presentation of the Enterprise, Strategic Business Fields, Revenues, Market Shares, Business Model

4. External Situation Analysis (Environment): Market Analysis, Relevant Markets, Market Growth & Competitors

5. Strategic Analysis (Stratregic Tools & Measures): Strategic Choices (Description and Evaluation), Chances & Risks of differnent measures, Strategic Recommendations

6. Implemention and Future Outlook: Coming up Problems and Solutions

3rd Online Workshop

In the third workshop, the remaining students are asked to present their strategic analysis concepts of the global web player. The presentations will be critically discussed. Selected questions, assumptions and hypotheses will be discussed and clarified.

Wrap-up session on site

This on site workshop is dedicated to the remaining students' presentations.

Examination

The students are working out a concept of strategic managment for one of the global web players: Amazon; Apple; Dell; Ebay; Facebook; Google; IBM; Intel; Lenovo; Microsoft; Nintendo; Oracle; Samsung; Sony; Twitter or Uber. The presentations will be evaluated by assessment criteria like common technical language, structure, stringent argumentation, market analysis, application of strategic methods and tools, results and strategic recommendations.

References

  1. "Wells, D.L. (2010). Strategic Management for Senior Leaders: A Handbook for Implementation. Arlington 2003. p. 4. http://govinfo.library.unt.edu/npr/initiati/mfr/managebk.pdf. 
  2. "SWOT Analysis". http://www.mindtools.com/pages/article/newTMC_05.htm. Retrieved 20.01.17. 
  3. "pest market analysis tool". http://www.businessballs.com/pestanalysisfreetemplate.htm. Retrieved 20.01.17. 
  4. "porter's five forces model". http://www.businessballs.com/portersfiveforcesofcompetition.htm. Retrieved 20.01.17. 

Past Course Pages