Strategic Management, Its Phases and Useful Concepts for the Formulation and Implementation of Value-Oriented Corporate Level Strategy

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Strategic Management, its Phases and useful Concepts for the Formulation and Implementation of value-oriented Corporate Level Strategy

Final Paper

Strategic Management

Department of Business Administration of

SHANDONG UNIVERSITY

[pic]

written by:

Priscila de Oliveira Vieira

2012.01.09

Table of Contents

1Introduction3

2Origins of Strategic Management4

3Phases and Concepts6

3.1Goal-setting6

3.2Strategic Environment Analysis7

3.2.1External Environment8

3.2.2Internal Environment10

3.3Strategy Formulation11

3.4Strategy Implementation16

4Summary18

Appendix19

A.1 External Environment19

A.2 PESTLE-Analysis19

A.3 Porter’s Five Forces20

A.4 Porter’s four corners analysis21

A.5 Porter’s Value Chain22

A.6 SWOT Analysis22

A.7 BCG- Portfolio23

A.8 McKinsey & Co. Portfolio24

A.9 McKinsey 7-S Model24

References25

Introduction

The increasing globalization of markets goes hand in hand with the intensification of competition and lower survival expectations for companies which are not up to the new challenges they are confronted with. Even firms that do not take into account to engage in international markets are suddenly competing with experienced multinational corporations for their local customers. Worldwide, there are plenty of recent examples of this kind of unequal competition, which can be found in both, the industrial and the commercial sector. The excessive number of current acquisitions, mergers and privatization represent the contemporary strategic initiatives on the part of companies in response to the increasingly acute global challenges. The progressive use of computers associated to telecommunications leads to the elimination of barriers, to the shortening of distances and therefore to the approximation of people as well as organizations. Due to diverse technology-induced changes in market characteristics, today’s economy diverges from the economy on which most of the developed economic theories are based on. The age of factories and mass production got replaced by the era of service and information exchange. The resulting impact is immense. As an example one can mention the rapid availability of accurate and reliable data for decision making whose importance for strategic managers is constantly growing and thus revolutionizing the way companies compete with each other. Flexibility, resilience and the reduction of response time resulting from technological progress are considered as new sources of competitive advantage. However, it turns out that the gain of market share and the related satisfaction of consumer’s needs is anything but an easy task in a world of rapidly changing customer preferences. Agility becomes the crucial requirement for successful business strategy, as the speed of the changes has never so fast. Under current prevailing market conditions, the only existing certainty is the presence of inevitable uncertainty. This radical change in process has a significant influence on both daily management and on competitiveness, and requires a new, more efficient way of doing business. This emerging restructuration of the markets requires agility and innovative resources enabling more vigorous competition in order to capture the fleeting moments of opportunity envisioned. The restructuration is closely linked to strategic management and to the business performance. The following chapters give an insight into the development of the discipline of “strategic management” and introduce the phases of the strategic planning and some existing concepts, for the formulation and implementation of value-oriented corporate-level strategies. Subsequently a summary will complete the paper.

Origins of Strategic Management

The term “strategy” derives from ancient Greek and means: “way to lead the army into the field” or “skill” to beat...
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