Lecture Strategic Management: Lesson 1 - Introduction and overview

Lecture Strategic Management - Lesson1: Introduction and overview has content 1.1. The definition of strategy and its importance, 1.2. Charting a company’s direction: Vision and Mission, Objectives and Strategy, 1.3. Strategy, ethics and corporate social responsibility.
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Lecture Strategic Management: Lesson 1 - Introduction and overview Lesson1–INTRODUCTION ANDOVERVIEWMcGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.LESSON1OUTLINE 1.1. The definition of strategy and its importance 1.2. Charting a company’s direction: Vision and Mission, Objectives and Strategy 1.3. Strategy, ethics and corporate social responsibility© 2013 by The McGraw-Hill Companies, 1–2 1-2LO1 Understand why every company needs a sound strategy to compete successfully, manage its business operations, and strengthen its prospects for long-term success.LO2 Develop an awareness of the five most dependable strategic approaches for setting a company apart from rivals and winning a sustainable competitive advantage.LO3 Understand that a company’s strategy tends to evolve over time because of changing circumstances and ongoing management efforts to improve the company’s strategy.LO4 Learn why it is important for a company to have a viable business model that outlines the company’s customer value proposition and its profit formula.LO5 Learn the three tests of a winning strategy. 1-3LO6 Grasp why it is critical for company managers to have a clear strategic vision of where a company needs to head and the importance of setting both strategic and financial objectives.LO7 Gain an understanding of conditions that give rise to unethical business strategies and behavior, the costs of business ethics failures and the concepts of corporate social responsibility and environmental sustainability. 1-4 1.1.THEDEFINITIONOF STRATEGYANDITS IMPORTANCEMcGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.1.1.1.Thedefinitionof StrategyStrategy’sThreeCentralQuestions Where are we now? Ø Current financial performance Ø Market standing Ø Competitive resources and capabilities Ø Changing industry conditions Where do we want to go from here? Ø What buyer needs to try to satisfy? Ø Which growth opportunities to emphasize? Ø How to change the business makeup? How are we going to get there? Ø Which competitive moves and business approaches to use as a strategy? 1-7WhatDoWeMeanByStrategy?A firm’s strategy is all about how: Ø How to attract and please customers. Ø How to compete against rivals. Ø How to position the firm in the marketplace to capitalize on attractive growth opportunities. Ø How best to respond to changing economic and market conditions. Ø How to manage each functional piece of the business. Ø How to achieve the firm’s performance targets. 1-8FIGURE 1.1 Elements of a Company’s Strategy 1-9  Core Concept A company’s strategy consists of thecompetitive moves and businessapproaches management hasdeveloped to attract and pleasecustomers, compete successfully,capitalize on opportunities to grow thebusiness, respond to changing marketconditions, conduct operations, andachieve performance objectives. 1-101.1.2.StrategyandtheQuestforCompetitiveAdvantage1.1.2.StrategyandtheQuestforCompetitiveAdvantage Gaining a sustainable competitive advantage requires: Ø Choosing to compete differently by doing what rivals don’t do or can’t do. Ø Appealing to buyers in ways that set the firm apart from its rivals. Ø Staking out a market position that is not crowded with strong rivals. 1-12 McDonald’s Strategy in the Quick-Service Restaurant IndustryKey initiatives of the Plan-to-Win strategy included: • Improved restaurant operations • Affordable pricing • Wide menu variety and beverage choices • Convenience and expansion of dining opportunities • Ongoing restaurant reinvestment and international expansion 1-13  Core Concept A firm achieves sustainablecompetitive advantage when anattractively large number of buyersdevelop a durable preference for itsproducts or services over the offeringsof competitors, despite the efforts ofcompetitors to overcome or erode itsadvantage ...