Strategic Management at New Economy in University
ในประเทศไทย คร??งท?? 11 Dr. Nut-tapon Paul Nimmanphatcharin (ดร. ณ?ฐพล น?มมานพ?ชร?นทร?)
BB.A., GD.Mgt., MB.Mgt., MBA (Inter Bus), Ph.D. (Mgt) Faculty of Business Administration, Siam University
Strategic Management at New Economy in University 1 Dr. Nuttapon Nimmanphatcharin @ 2003
235 Petkasem Road, Phasicharoen, Bangkok 10163 Tel. (662) 457-0068 FAX (662) 457-3982, 467-3174
Strategic Management at New Economy in University
Several research studies have defined strategic management as the process of setting and accomplishing goals
through the use of human, technical, and financial resources within the context of the environment variables.
Additionally, strategic management as the process of sharing goals & values, strategy, structure, systems, staff,
skills, styles, and succession. However, most of the research maintains that strategic management is driven by
the top level of an organisation.
2 STRATEGIC MANAGEMENT
The literature review will begin with the strategic management process that can be viewed as containing
similar processes to a formalised strategic planning system and then focus on environmental and resource
aspects. This paper will also continue with the development of corporate strategy by some tools and
2.1 Strategic management process
Many research studies define the strategic management process in different ways, but the aim of the process is
to build a market position strong enough and an organisation capable enough to produce successful
performance despite unforeseeable events, potent competition, and internal problems.
Figure 2.1: Five tasks of strategic management
Task 1: Task 2: Task 3: Task 4: Task 5: Develop a Setting Crafting Implementing Evaluating Strategic Objectives Strategy to and executing the Performance, Vision and Achieve the Strategy Reviewing New Objective Business Developments and Mission Initiating Corrective Adjustments.
Revise as Needed Improve/Change as Recycle to Tasks 1,2,3, and Needed 4 as needed
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It would suggest that the strategic management process as being involved with identifying environmental problems and opportunities and internal strengths and weaknesses. This step is called “Analysis and Diagnosis”. Then follows “Choice”, “Implementation”, and “Evaluation”. These three steps are concerned with generating alternative solutions to the problem, making the strategy work by building the structure to support the strategy and developing appropriate plans and policies, and getting feedback to determine whether the strategy is working or taking steps to make it work.
2.2 Environmental and resource analysis
The analysis of the environment is a major stage of the strategic management process, which is concerned with providing an understanding of the current situation that the organisation faces. Let say, the analysis of the environment the impact of internal and external factors is assessed. These influences can play a major role in the development of strategies, as they help identify potential opportunities and threats to the organisation.
Environmental analysis can be undertaken in three parts: the general environment analysis, the immediate environment analysis, and the internal environment analysis.
2.2.1 External environment
The following discussion will cover the two major divisions, namely general environment and immediate environment.
A) General environment
The general environment, that which is outside the university control and happening in the broader area can be considered under the following headings:
P Political ,
E Economic ,
S Social ,
T Technological .
B) Immediate environment
The immediate competitive environment for university is its industry. In the industry, the universities need to examine their competitors and competitive forces that might be a direct or indirect influence on their products
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Siam University 1and services. The universities will get some idea from the examination of the general environment of the
impact of these factors on the competitive environment at the industry level. In addition, the impact could best
be understood by focusing on who the distinctive actors are and how they behave competitively. Let say, the
factors in the immediate environment, an organisation might be concerned with include the role of the
government, state owned universitys, competitors, business groups (industry), and multinational corporations.
The characteristics of the immediate environment model into two main groups – industry activities and the industry actors. The first examination concentrates on the big picture of the industry, with a focus on the size
of the industry, characteristics of the industry, the stage in life cycle of the industry, future challenges to the
2industry, the market of the industry, and competitive forces (the five forces of the industry). Secondly, the
examination concentrates on the industry actors, which are divided into two main groups – direct actors and indirect actors. The direct actors are participants who are heavily involved in the industry such as competitors,
buyers, suppliers, substitutes, and potential competitors. On the other hand, the indirect actors could possibly
345be the government, the general environment factors, and related business groups. The examination of the immediate environment is shown in figure 2.2.
Figure 2.2: Examination of immediate environment model
Indirect Actors Government Related Business Groups General Environments
Bargaining Power of Buyers
Root of the Industry Size Barriers to Entry Characteristic Intensity of Rivalry Stage Life Cycle Future Challenges
Substitution pressures Bargaining power of Suppliers
Direct Actors Buyers Suppliers Competitors Potential Competitors Potential Substitutes Government
1 Consist of Political, Economic, Social/Culture, and Technological Factors. 2 Note that, the competitive forces are intensity of rivalry, barriers to entry, substitution pressures, bargaining power of suppliers and buyers. 3 Note that, it could be the impact of the government policies to the universities. 4 The impact from PEST factors to the industry. 5 The related business group could be the enterprise in other industries who doing the business with our industry.
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2.2.2 Internal environment A) Vision and mission statements It would suggest that the vision of the university should describe the purpose of the organisation. Let say,
the vision need not be grandiose, but it should be an articulate statement about where you would like to
see the university in the future.
On the other hand, the mission statement is a declaration of how the organisation’s customers, products, services, markets, and philosophy all contribute to the achievement of the university's vision.
Significantly, an organisation’s objective, strategies and performance measures should then flow from its
vision and mission, as shown in figure 2.3.
Figure 2.3: Objectives strategies and performance measures flow from vision and mission
Vision Strategies Performance measures
Mission Short –term objectives
Long –term objectives Strategies
B) Internal analysis
Once the external analysis is complete, the strategist's attention can turn directly to the internal environment
analysis of the university. The guidelines as shown in figure 2.4 will assist the university to analyse all of the
internal factors that are involved with its business. It would suggest that the information from an internal
analysis will depend on the age of the university, its size, and the breadth of its activities.
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Figure 2.4: Internal environment analysis for successful business
1) History 2) Skill and Resources
2.1) Management 2.4) Quality Management ? Organisational Structure and Size ? Quality Control ? Management Profiles and Ownership ? Quality Assurance ? Management Style and Culture ? Quality Accreditation ? Strategic management ? Performance Measures ? Current University Goals 2.5) Innovation Management ? Problem Perceived by Management ? Product Innovation 2.2) Marketing ? Process Innovation ? Products and Services ? Resource Allocation ? Pricing Policies ? R & D Capabilities ? Promotion ? Performance Measures ? Distribution/Place 2.6) Human Resource Management ? Marketing Strategy ? Organisation Culture ? Performance Measures ? Employee Moral and Motivation 2.3) Operations ? Communication and Information System ? Potential Clients ? Training and Development ? Layout and flow lines ? Reward and Incentive systems ? Equipment ? OH &S Management ? Facility location and Size ? Performance Measures ? Process Technologies 2.7) Finance ? Information Systems ? Profit and Loss Statements ? Performance Measures ? Current Balance Sheet
? Cash Flow ? Financial Ratio Analysis
? Funding Requirements
2.2.3 University situation analysis and techniques A) SWOT analysis
Strategic management involves aligning an organisation’s opportunities and threats with its strengths and weaknesses.
Strengths and weaknesses will be generated from internal factors such as, the univeristy's people,
products/services, operations and facilities, and so forth. On the other hand, opportunities and threats will be
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Siam University picked up from external factors like its markets, the environment, and competitors. These aspects are shown in
figure 2.5. Many researchers identify that an organisation needs to focus on internal differential strengths and
weaknesses by comparing themselves with competitors and key external opportunities and threats.
Figure 2.5: Identify strategy by SWOT analysis
SWOT Analysis Matrix Model
Internal Strengths Weakness External Factors Factors Opport… Threats
Develop Strategy by using SWOT Analysis.
B) Key success factors analysis
KSFs are business aspects that all universities in the industry must pay close attention to in order to achieve
the specific outcomes crucial to market success and the competencies and competitive capabilities with the
most direct bearing on university profitability.
C) Driving forces analysis
One tool that might help the university in establishing its business strategies is Driving and Restraining
Forces, shown in figure 2.6.
Figure 2.6: Driving and restraining forces analysis
Identify the driving and restraining forces.
Help Impacts Hinder Impacts
Decision-makers agree or disagree on overall strategies the university is willing to commit to
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D) Sustainable competitive advantage analysis
SWOT, KSFs, Driving Forces, and Business Strategy analysis will help the university identify its sustainable
competitive advantages, which are particular capabilities that will enable the university to maintain a
sustainable position against its key competitors. The university will use all these analyses and sustainable
competitive advantages to establish its new business strategies to meet the organisation’s visions, missions,
and objectives. The related processes of business objectives formulation, SWOT analysis, KSFs analysis,
driving force analysis, and environment variable analysis are shown in figure 2.7.
Figure 2.7: Related processes of business objectives, SWOT analysis, KSFs, sustainable competitive advantage,
General and Immediate Internal Environment
Environment Analysis Analysis
Opportunities and Strengths and
Threats Analysis Weaknesses Analysis
SWOT Analysis Key Success Factors
Sustainable Business's Competitive Objectives Advantage
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The university management team needs to undertake a process, which will allow it to assess three key questions through the use of the tools shown in figure 2.8.
Figure 2.8: Key questions and tools
SWOT Analysis Where is the university now? Key Success Factors (Present)
Where does the university want to Business long-term objectives be? (Long-term objectives)
Answered by Business Strategies, Driving Forces Analysis, Sustainable Competitive How does the university get Advantage there? (Strategies)
3.1 Planning techniques
Planning techniques are required at each level of the management. However, this part analyses the models and techniques that should be used to help facilitate decision-makers and analysts (university management teams or corporate level).
A) TOWS technique
TOWS matrix builds on the analysis provided by SWOT. This is a technique to help management teams formulate strategy. Opportunity, strengths and weaknesses of the companies are identified in the TOWS matrix. Let say, the management teams could possibly use internal strengths to take advantage of opportunities and to overcome internal weaknesses. This technique is shown in figure 2.9.
Figure 2.9: TOWS matrix framework
Strengths (S) Weakness (W) (List of internal strengths) (List of internal weaknesses)
Opportunities (O) SO Strategies WO Strategies (List external opportunities) (Use internal strengths to take (Take advantage of external advantage of opportunities) opportunities to overcome weaknesses)
Threats (T) ST Strategies WT Strategies (List of external threats) (Use internal strengths to avoid (Minimise internal weaknesses external threats) and avoid external threats)
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In addition, the management teams are able to generate strategies by using internal strengths to avoid threats, while minimizing weaknesses will also help them to deal with external threats. Finally, Several research
studies conclude that the TOWS matrix is the combination of external and internal environments in order to
identify best strategies, which could be used in corporate and business levels of the organisations.
3.2 Strategy evaluation
Several studies state that corporate strategy evaluation at the widest level involves seeking answer to the
? Are the current objectives of the organisation appropriate?
? Are the strategies created previously and which are currently being implemented to achieve these
objectives still appropriate?
? Do current results confirm or refute previous assumptions about the feasibility of achieving the objectives
and the ability of the chosen strategies to achieve the desired results?
In conclusion, in simple terms the corporate strategy evaluation is to analyse the strategies which meet the
needs and preferences of the organisation and its key decision-makers and influences – ideally better than any
other strategic alternatives. At the same time, the corporate strategy evaluation also will help the management teams identify the future strategy that could possibly be implemented successfully.
3.3 Strategy implementation
Several research studies state that implementation incorporates a number of aspects, some of which can be
changed directly and some of which can only be changed indirectly. Let say, the major implementation themes
concern organisation structure, strategies, planning system, policies, control system, and environmental
It would suggest that to be successful in strategy implementation, university should meet the following criteria: ? Clear responsibility for the successful outcome of planned strategic change should be allocated, ? The number of strategies and availability being pursued at any time should be limited. The ability of the
necessary resources to cope with the changes should be seen as a key determinant of strategy and should
not be overlooked,
? Necessary action to implement strategies should be identified and planned and again responsibility should
be allocated, and
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