Chapter 1 Introduction to Strategic Management

key to sustainable successful strategic performance

emphasize the organization's unique and difficult to imitate advantages

Michael Porter

father of modern strategy

forecast-based planning

five year budget, basis is internal and environmental information, competition for funding of projects can be very political

SCA

sustainable competitive advantage

basic financial planning

basically the yearly budget, time horizon 1 year, basis is internal information

portfolio theory

a broad portfolio of business units could be used to reduce risks

competitive advantage

accomplished by value added strategy; identifying company's unique value and then leveraging it

transaction cost economics

centers of the role of hierarchies as alternative mechanisms for completing transactions; assumes that human behaviors impact transactions

strategic management

planning groups formed with key employees from many levels, develop and integrate strategic plans to achieve company objectives, detailed implementation, evaluation and control issues; planning is interactive through out the organization

PIMS

profit impact of marketing strategies

agency theory

recognizes the need for alignment of owners/shareholders and management

externally oriented (strategic) planning

senior management control of planning process, possible creation of planning staff, competitive intelligence units, five year horizon, implementation by lower level employees

two branches of organizational economics

transaction cost economics and agency theory

dynamic circle

vision, mission, values -> situation analysis -> strategic goals -> strategy formulation -> strategy implementation -> evaluation and control