● The Evolution of Strategic Management
○ Strategic management: associated with increasing focus on competition as the central characteristic of the business environment and competitive advantage as the primary goal of strategy.
○ 1950-60: Financial Budgeting - control through operating budgets
○ 1960-70: Corporate planning - long term planning (5 years) that set goals and objectives, forecast key economic trends and allocated capital expenditures
○ 1970-80: Strategy as positioning - industry analysis, market segmentation, PIMS planning
○ 1980-90: focus on a competitive advantage - alliances, shareholder value max.
○ 1990-2000: strategic innovation, new business models
○ 2000-2010: CSR and business ethics, winner take all, global strategies
● What is Strategy;
○ Strategy: the means by which individuals or organizations achieve their objectives
○ it is the search for:
■ new sources of profit (create)
■ opportunities to increase the volume over which margins are earned (exploit)
■ opportunities to extend the period over which margins can be sustained (defend)
○ Corporate vs. Business Strategy
■ Corporate: defines the scope of the firm in terms of the industries and markets in which it competes - vertical integration, acquisitions
■ Business: is concerned with how the firm competes within a particular market. AKA: competitive strategy ○ Intended, Realised, Emergent
■ Intended Strategy: strategy as conceived by the top management team. It is less a product of deliberation and more an outcome of negotiation
■ Realised Strategy: the actual strategy that is implemented; it is only partly related to that which was intended (10-30%)
■ Emergent Strategy: the decisions that emerge from the complex processes in which individual managers interpret the intended strategy and adapt to changing external circumstances
● Planned emergence - strategic planning