BM303B
Notes by Chrizel Breytenbach
, BM303B
Strategic management process Study Unit 1 / Chapter 1
Introduction It is important to realise that an organisation’s management can influence
the competitive landscape to fit the organisation better. Management
® In a world where competition is fierce and the environment often should encourage innovation instead of trying to improve what is already
unpredictable, organisations have to plan for the future and there.
prepare themselves for any unforeseen circumstances.
® The competitive landscape is characterised by significant and The four transformations influencing a business model:
continuous change resulting from the impact and spread of the § Expansion of available strategic space
Internet. - The forces of change have provided businesses with a new
® Managers should realise that their actions and decisions can influence playing field and developments.
the competitive landscape. - Example: The emergence of digitalization as a result of the 4th
Industrial revolution.
It is widely accepted that organisations operate in a VUCA world in - It provides strategies with new opportunities.
current times. This acronym is made up as follows: § Globalisation
- Globalisation forces strategists to come to terms with multiple
V – Volatile: Refers to the immense rate of change in the business
geographic locations, new standards, capacity to adapt to local
world. Things are changing constantly and it is almost impossible for needs, multiple cultures and collaboration across national and
organisations to keep up with this change by focusing on how to deal with regional boundaries.
this volatility.
- All of which contribute to the complexity of strategic
management
U – Uncertain: Organisations are unclear about the future. They must
§ Speed
plan for uncertainty.
- Reaction speed is critical due to the nature of competitive
C – Complex: Competing in todays business world requires an change. Strategy should be a constant topic in discussion and
understanding of multiple key decision factors. Are the decisions right for debate.
what the organisation has set out to achieve. - Speed also referes to how fast companies can learn new
technologies and integrate them.
A – Ambiguous: Refers to the lack of clarity about the meaning of a - Constant change necessitates a capacity to learn and act fast for
situation. Not everything is simple and straightforward as it was in the companies that want to build or keep their source of
past. competitive advantage
§ Innovation
This environment needs to be monitored and managed over the years as - Innovation has always been a source of competitive advantage
competition, organisations and the business environment change. - Organisations should change with the environment and focus on
aggressively pursuing innovation as a competitive advantage.
Notes by Chrizel Breytenbach
, BM303B
1. What is strategic management? Characteristics of a good strategy:
o It takes account of opportunities and threats in the market and
& Strategic management can be defined as the process whereby all
strengths and weaknesses in the organisation
an organisation’s functions and resources are coordinated, in order to
o It maps out the fundamental and long-term direction of fields of
achieve long-term goals and thereby gaining a competitive advantage.
activity and ranges of service
o It can relate to various units. (Organisation as a whole and different
The importance of strategic management is about the following:
departments)
• Long-term strategy and goals o It must be revised if changes are made to the basic external or
• Integrating all aspects of the organisation internal framework.
• Gaining a competitive advantage o Also means deciding what should not be done.
• Formulating strategies that facilitate the factors above.
1.2 People involved:
1.1 Views on strategy: In any organisation, the human resources is the most important factor
Traditional strategies have changed over the years. It is therefore important driving the organisation. The same goes for developing and managing a
to focus on the new emerging and customised strategies strategy. Without people, in this case the right people, a successful strategy
instead of using outdated strategies. This strategy is not simply a plan but and strategic management will not be possible.
would develop purpose and identity for an entire organisation.
& A strategic planning champion (SPC) is a strategy practitioner
who can guide the strategic processes of an organisation.
A SPC should possess the following aspects:
• Social craftsperson who brings different stakeholders’
expectations together
• An artful intrapreneur. A person who understands that each
organisation is unique and needs a unique strategy
• A known stranger. Needs to be neutral.
Four different views: 1.3 Qualitative and quantitative decision
- Focus on utilization of resources to fulfil long-term goals. (Chandler)
Strategic management involves both qualitative and quantitative decisions for
- Focus on differentiation (Porter) analysis and assessment. The idea will be to make qualitative and quantitative
- A set of patterns that develop over time (Mintzberg) decisions together in order to build and manage a proper strategy.
- The long term direction of an organization (Johnson)
Notes by Chrizel Breytenbach
, BM303B
® Quantitative decisions are built on proper strategic analysis and D Stage 4: Strategic implementation
choices. • The strategy that has been developed to suit the specific
® Qualitative decisions are based on perception of the strategic organisational needs to be implemented.
manager. • By using driving forces, an organisation can achieve the goals and
missions that have been set.
2. The strategic management process
There are five stages in developing a strategic management D Stage 5: Application
process: • A strategic management process applies to all types of organisations
including non-profit and global organisations.
D Stage 1: Strategic visualisation • Managers should realise that it should not only be used in large
• Visualisation techniques should be used to improve an organisation’s organisations but in all organisations, regardless of the size.
strategic management process.
• Visualisation is the graphical representation of strategic content 3. Functional aspects (benefits) of strategic management
necessary in the strategic process. Benefits of strategic management may differ in terms of who and
what is influenced by the strategy as well as in which stage of the strategic
D Stage 2: Organisational direction and environmental management process an organisation finds its strategy.
analysis
• A common and established method of understanding and familiarising The benefits of strategic management:
an organisation with its strategy is by using vision and mission • Higher profitability
statements. • Higher productivity
• Together with this, organisations should use an environmental • Improved communication across the different functions of the
analysis, also known as a SWOT analysis, to recognise the strengths, organisation
weaknesses, opportunities and threats of an organisation. • Empowerment
• Quantitative data is summarized by standard techniques and • Discipline and a sense of responsibility to the management of the
qualitative data can be structured by standard structures. organisation
• Techniques: Porters five models and S-curve diagram can be used. • More effective time management
• More effective resource management
D Stage 3: Strategic formulation • Change management
• In the third step, the organisation needs to develop long-term goals
and ways of achieving these goals.
• In addition to developing an organisational strategy, an organisation Ultimately, we want to achieve a competitive advantage
should also focus on generic and ‘grand’ strategies.
• Techniques that can be used are knowledge mapping, mind maps,
concept mapping, decision trees and morphological boxes.
Notes by Chrizel Breytenbach
Notes by Chrizel Breytenbach
, BM303B
Strategic management process Study Unit 1 / Chapter 1
Introduction It is important to realise that an organisation’s management can influence
the competitive landscape to fit the organisation better. Management
® In a world where competition is fierce and the environment often should encourage innovation instead of trying to improve what is already
unpredictable, organisations have to plan for the future and there.
prepare themselves for any unforeseen circumstances.
® The competitive landscape is characterised by significant and The four transformations influencing a business model:
continuous change resulting from the impact and spread of the § Expansion of available strategic space
Internet. - The forces of change have provided businesses with a new
® Managers should realise that their actions and decisions can influence playing field and developments.
the competitive landscape. - Example: The emergence of digitalization as a result of the 4th
Industrial revolution.
It is widely accepted that organisations operate in a VUCA world in - It provides strategies with new opportunities.
current times. This acronym is made up as follows: § Globalisation
- Globalisation forces strategists to come to terms with multiple
V – Volatile: Refers to the immense rate of change in the business
geographic locations, new standards, capacity to adapt to local
world. Things are changing constantly and it is almost impossible for needs, multiple cultures and collaboration across national and
organisations to keep up with this change by focusing on how to deal with regional boundaries.
this volatility.
- All of which contribute to the complexity of strategic
management
U – Uncertain: Organisations are unclear about the future. They must
§ Speed
plan for uncertainty.
- Reaction speed is critical due to the nature of competitive
C – Complex: Competing in todays business world requires an change. Strategy should be a constant topic in discussion and
understanding of multiple key decision factors. Are the decisions right for debate.
what the organisation has set out to achieve. - Speed also referes to how fast companies can learn new
technologies and integrate them.
A – Ambiguous: Refers to the lack of clarity about the meaning of a - Constant change necessitates a capacity to learn and act fast for
situation. Not everything is simple and straightforward as it was in the companies that want to build or keep their source of
past. competitive advantage
§ Innovation
This environment needs to be monitored and managed over the years as - Innovation has always been a source of competitive advantage
competition, organisations and the business environment change. - Organisations should change with the environment and focus on
aggressively pursuing innovation as a competitive advantage.
Notes by Chrizel Breytenbach
, BM303B
1. What is strategic management? Characteristics of a good strategy:
o It takes account of opportunities and threats in the market and
& Strategic management can be defined as the process whereby all
strengths and weaknesses in the organisation
an organisation’s functions and resources are coordinated, in order to
o It maps out the fundamental and long-term direction of fields of
achieve long-term goals and thereby gaining a competitive advantage.
activity and ranges of service
o It can relate to various units. (Organisation as a whole and different
The importance of strategic management is about the following:
departments)
• Long-term strategy and goals o It must be revised if changes are made to the basic external or
• Integrating all aspects of the organisation internal framework.
• Gaining a competitive advantage o Also means deciding what should not be done.
• Formulating strategies that facilitate the factors above.
1.2 People involved:
1.1 Views on strategy: In any organisation, the human resources is the most important factor
Traditional strategies have changed over the years. It is therefore important driving the organisation. The same goes for developing and managing a
to focus on the new emerging and customised strategies strategy. Without people, in this case the right people, a successful strategy
instead of using outdated strategies. This strategy is not simply a plan but and strategic management will not be possible.
would develop purpose and identity for an entire organisation.
& A strategic planning champion (SPC) is a strategy practitioner
who can guide the strategic processes of an organisation.
A SPC should possess the following aspects:
• Social craftsperson who brings different stakeholders’
expectations together
• An artful intrapreneur. A person who understands that each
organisation is unique and needs a unique strategy
• A known stranger. Needs to be neutral.
Four different views: 1.3 Qualitative and quantitative decision
- Focus on utilization of resources to fulfil long-term goals. (Chandler)
Strategic management involves both qualitative and quantitative decisions for
- Focus on differentiation (Porter) analysis and assessment. The idea will be to make qualitative and quantitative
- A set of patterns that develop over time (Mintzberg) decisions together in order to build and manage a proper strategy.
- The long term direction of an organization (Johnson)
Notes by Chrizel Breytenbach
, BM303B
® Quantitative decisions are built on proper strategic analysis and D Stage 4: Strategic implementation
choices. • The strategy that has been developed to suit the specific
® Qualitative decisions are based on perception of the strategic organisational needs to be implemented.
manager. • By using driving forces, an organisation can achieve the goals and
missions that have been set.
2. The strategic management process
There are five stages in developing a strategic management D Stage 5: Application
process: • A strategic management process applies to all types of organisations
including non-profit and global organisations.
D Stage 1: Strategic visualisation • Managers should realise that it should not only be used in large
• Visualisation techniques should be used to improve an organisation’s organisations but in all organisations, regardless of the size.
strategic management process.
• Visualisation is the graphical representation of strategic content 3. Functional aspects (benefits) of strategic management
necessary in the strategic process. Benefits of strategic management may differ in terms of who and
what is influenced by the strategy as well as in which stage of the strategic
D Stage 2: Organisational direction and environmental management process an organisation finds its strategy.
analysis
• A common and established method of understanding and familiarising The benefits of strategic management:
an organisation with its strategy is by using vision and mission • Higher profitability
statements. • Higher productivity
• Together with this, organisations should use an environmental • Improved communication across the different functions of the
analysis, also known as a SWOT analysis, to recognise the strengths, organisation
weaknesses, opportunities and threats of an organisation. • Empowerment
• Quantitative data is summarized by standard techniques and • Discipline and a sense of responsibility to the management of the
qualitative data can be structured by standard structures. organisation
• Techniques: Porters five models and S-curve diagram can be used. • More effective time management
• More effective resource management
D Stage 3: Strategic formulation • Change management
• In the third step, the organisation needs to develop long-term goals
and ways of achieving these goals.
• In addition to developing an organisational strategy, an organisation Ultimately, we want to achieve a competitive advantage
should also focus on generic and ‘grand’ strategies.
• Techniques that can be used are knowledge mapping, mind maps,
concept mapping, decision trees and morphological boxes.
Notes by Chrizel Breytenbach
