Strategic Management

TABLE OF CONTENTS

INTRODUCTION 3

I. WHAT IS STRATEGY ? 4

A. Fundamentals of strategy 4

II. TOOLS OF STRATEGIC MANAGEMENT 6

A. External analysis 6

B. Internal analysis 7

III. STRATEGY IN ACTION 9

A. Corporate strategy of development 9

B. Case example: Kellogs 10

SUMMARY 12

INTRODUCTION

It is increasingly recognized that strategic management is crucial in ensuring effectiveness in organizations to an ever changing and complex environment. A recent article from Financier Worldwide magazine headline: “Glencore and Xstrata Agree $90bm Tie-up”. Thus, Anglo-Swiss commodities firms Glencore International and Xstrata agreed in October 2012 to come together to create a group with a combined market value of $90bm.

Resultantly, strategy now seeks to emphasize flexibility and continuous development to ensure that organisations can survive and compete in an ever more competitive environment. Indeed, the need for effective strategic management has never been more pronounced than it is today. The continuing growth of world markets increased availability of management in different country. The globalization of business is making the strategy more and more important. All companies are faces with the challenges of decisions making.

Therefore, we should begin our study by firstly recognized the fundamentals of strategic management. Then, we will underline its importance and highlights the principal strategy’s tools through different examples of organizations.

I. WHAT IS STRATEGY ?

A. Fundamentals of strategy

-The specifics of the strategy

Strategic Management is a discipline dealing with problems of decision making in organizations. It covers a particular class of decision: strategic decisions. These decisions affect the future of the company. It answers the question: Where we want to go?

-The meanings of the strategy

Strategy can be defined as a position: In this case, it will be to position the company at its external environment by answering the following question: what activities developed abandon what activities and what upcoming events?

Strategy can be defined as a perspective: In this case, the strategy is defined as discourses. It aims to give a sense to the internal members and partners. Here the strategy answers the question: Where are we going?

Strategy can be defined as the process of interpretation: Here the strategy is a social construction. It is constructed from belief, political games, and different individuals. The strategy is also compromised one.

- The company: a plurality of logic

There are several strategies. The reasons for this diversity are:

Finalizable organization: Company is an entity that leaders must govern. Therefore, the strategy is defined as evidence to build or expand, maneuvers to design and major decisions making such as internationalization, acquisition, or even the development of a new activity.

A socio-political arena: Company is a social organization marked by the relationships between the different actors, power relations, political games, ambitions. Here the strategy appears to be a compromised as a bargaining game.

A place for discussion: The strategy appears to be a mental construction and discourse constructed by leaders. In this instance, Strategy is a sort of guide.

This guide describes the major directions of development. It sheds light on the economic social and ethical choices.

What you want to do? What we can do?

A firm is controlled by the environment and the market. The strategy appears to be an external positioning to build, in correlation with the different power relations existing in the market. Taking account of these different approaches in a specific area, several strategies are possible. The strategy is not completely a rational process.

II. TOOLS OF STRATEGIC MANAGEMENT

A. External analysis

Analysis of Porter:

The starting point of the Porter’s analysis is the economic sector. The chain is defined by all technical and commercial operations, from raw materials to the final product. A notion of economic sector adds two other concepts:

• Activity sector: it is the environment where the company studied and its competitors meet themselves.

• The strategic corporate field: corresponds to the company's strategic scope, i.e., the different events that may affect the development of the company.

This analysis takes into account all the forces affecting the competitive position of the company. Forces are: suppliers, competitors, distribution channels, customers and potential competitors. We recognized 4 steps:

1) The identification of competitive forces.

2) The evaluation of the intensity of competitive forces identified.

3) The identification

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