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Strategic Management Course Description Strategic Management Contents 1 Concept / Big picture 2 Intended Learning Outcomes 3 Structure of the Course 3.1 Introduction 3.2 Mission Statement and Objectives 3.3 Situation Analysis (Internal Situation and Environmental Analysis) 3.4 Strategy Analysis (Strategic Concepts & Tools) 3.5 Strategy Implementation and Future Outlook 4 Didactic Concept, Schedule and Assignments 4.1 Introductory lesson on site 4.2 1st Online Workshop 4.3 2nd Online Workshop 4.4 3rd Online Workshop 4.5 Wrap-up session on site 5 Examination 6 Readings 7 References 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 defnitions, students will be exposed to the most important classical 1 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. • defne 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 six key questions: 1. Strategic Challenges and Megatrends: Which are the crucial economic, technological and societal megatrends to face (now and in the next future)? 2. Mission Statement and Visions: What is the mission of the enterprise? And what are the business’ objectives? 3. Internal Situation: Where are we now? What are our strategic business felds, revenues and profts? 4. Environmental Situation (External Situation): How about our business' environment? What is the relevant market, how is the market growth and who are our competitors? 2 5. 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? 6. 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 fexibility, 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: specifc, measurable, achievable, realistic and terminated. It is because the company can monitor its progress and make corrections as needed. Situation Analysis (Internal Situation and Environmental Analysis) Once the frm has specifed its objectives, it devises a strategic plan to reach those objectives. For their strategic plan the company has to know the relevant strategic business felds and their specifc current (market) situation. This situation analysis is inevitable to identify know the standing of the enterprise and a basic knowledge for its strengths and weaknesses. The frm 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, profts, market shares and strategic business felds 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 Concepts & Tools) 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 frst-metnioned concepts will be explained in the frst online meeting, here is a short overview of the last- mentioned three concepts: 3 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 frm's strengths and weaknesses, and for identifying both the opportunities and the threats the frm 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 frm 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, infation, interest rates, stock market conditions, disposable income, and employment, in aggregate or on a sector specifc basis. Internationally, you might also consider import/export conditions, foreign exchange conditions, and trade defcits/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
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