Siam University

SIAM UNIVERSITY

Strategic Management at
New Economy in
University

.
Dr. Nut-tapon Paul Nimmanphatcharin

11

(. )

BB.A., GD.Mgt., MB.Mgt., MBA (Inter Bus), Ph.D. (Mgt)

Faculty of Business Administration, Siam University
235 Petkasem Road, Phasicharoen, Bangkok 10163
Tel. (662) 457-0068 FAX (662) 457-3982, 467-3174

Strategic Management at New Economy in University

Dr. Nuttapon Nimmanphatcharin @ 2003

Siam University

Strategic Management at New Economy in University

1 INTRODUCTION
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

techniques.

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:
Develop a Strategic
Vision and
Business Mission

Task 2:
Setting Objectives

Task 3:
Crafting Strategy to
Achieve the
Objective

Revise as Needed

Strategic Management at New Economy in University

Dr. Nuttapon Nimmanphatcharin @ 2003

Task 4:
Implementing and
executing the
Strategy

Improve/Change as Needed

Task 5:
Evaluating
Performance,
Reviewing New
Developments and
Initiating Corrective
Adjustments.

Recycle to Tasks 1,2,3, and 4 as

needed

Siam University

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,

Economic,

Social,

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
and services. The universities will get some idea from the examination of the general environment 1 of the
1

Consist of Political, Economic, Social/Culture, and Technological Factors.

Strategic Management at New Economy in University

Dr. Nuttapon Nimmanphatcharin @ 2003

Siam University

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
industry, the market of the industry, and competitive forces 2 (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
be the government3, the general environment factors 4, and related business groups5. The examination of the
immediate environment is shown in figure 2.2.
Figure 2.2: Examination of immediate environment model

Indirect
Indirect Actors
Actors
Government
Government
Related
Related Business
Business Groups
Groups
General
General Environments
Environments

Bargaining Power of Buyers

Intensity of Rivalry

Root
Root of
of the
the Industry
Industry
Size
Size
Characteristic
Characteristic
Stage
Stage Life
Life Cycle
Cycle
Future
Future Challenges
Challenges
Market
Market

Barriers to Entry

Substitution

pressures

Bargaining power of Suppliers

2
3
4
5

Direct
Direct Actors
Actors
Buyers
Buyers
Suppliers
Suppliers
Competitors
Competitors
Potential
Potential Competitors
Competitors
Potential
Potential Substitutes
Substitutes
Government
Government
Note that, the competitive forces are intensity of rivalry, barriers to entry, substitution pressures, bargaining power of suppliers and buyers.
Note that, it could be the impact of the government policies to the universities.
The impact from PEST factors to the industry.
The related business group could be the enterprise in other industries who doing the business with our industry.

Strategic Management at New Economy in University

Dr. Nuttapon Nimmanphatcharin @ 2003

Siam University

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 organisations customers, products,
services, markets, and philosophy all contribute to the achievement of the university's vision.
Significantly, an organisations 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.

Strategic Management at New Economy in University

Dr. Nuttapon Nimmanphatcharin @ 2003

Siam University

Figure 2.4: Internal environment analysis for successful business

1) History
2) Skill and Resources
2.1) Management

Organisational Structure and Size

Management Profiles and Ownership

Management Style and Culture

Strategic management

Current University Goals

Problem Perceived by Management

2.2) Marketing

Products and Services

Pricing Policies

Promotion

Distribution/Place

Marketing Strategy

Performance Measures

2.3) Operations

Potential Clients

Layout and flow lines

Equipment

Facility location and Size

Process Technologies

Information Systems

Performance Measures

2.4) Quality Management

Quality Control

Quality Assurance

Quality Accreditation

Performance Measures

2.5) Innovation Management

Product Innovation

Process Innovation

Resource Allocation

R & D Capabilities

Performance Measures

2.6) Human Resource Management

Organisation Culture

Employee Moral and Motivation

Communication and Information System

Training and Development

Reward and Incentive systems

OH &S Management

Performance Measures

2.7) Finance

Profit and Loss Statements

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 organisations 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
picked up from external factors like its markets, the environment, and competitors. These aspects are shown in
Strategic Management at New Economy in University
Dr. Nuttapon Nimmanphatcharin @ 2003

Siam University

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
Strengths

Internal
Internal
Factors
Factors

Weakness

Opport

Threats

External
External
Factors
Factors

Conclusion

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
Help Impacts
Impacts
Determine Strategy

Hinder
Hinder
Impacts
Impacts

Decision-makers
Decision-makers agree
agree or
or disagree
disagree on
on overall
overall
strategies
strategies the
the university
university is
is willing
willing to
to commit
commit to
to

Strategic Management at New Economy in University

Dr. Nuttapon Nimmanphatcharin @ 2003

Siam University

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 organisations 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, and
strategies.
General and Immediate
Environment Analysis

Internal Environment
Analysis

Opportunities and Threats

Analysis

Strengths and Weaknesses

Analysis

SWOT Analysis

Sustainable
Sustainable
Competitiv
Competitiv
ee
Advantage
Advantage

Driving
Driving
Forces
Forces

Key Success Factors

Business's
Objectives
Options

Business's
Strategies

3. STRATEGY
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.

Strategic Management at New Economy in University

Dr. Nuttapon Nimmanphatcharin @ 2003

Siam University

Figure 2.8: Key questions and tools

Where
Where is
is the
the university
university now?
now?
(Present)
(Present)

Answered
Answered by
by

Where
Where does
does the
the university
university want
want
to
to be?
be?
(Long-term
(Long-term objectives)
objectives)

Answered
Answered by
by

How
How does
does the
the university
university get
get
there?
there?
(Strategies)
(Strategies)

SWOT Analysis
Key Success Factors

Business long-term objectives

Answered
Answered by
by

Business Strategies,
Driving Forces Analysis,
Sustainable Competitive
Advantage

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)
(List of internal strengths)

Weakness (W)
(List of internal weaknesses)

Opportunities (O)
(List external opportunities)

SO Strategies
(Use internal strengths to take
advantage of opportunities)

WO Strategies
(Take advantage of external
opportunities to overcome
weaknesses)

Threats (T)
(List of external threats)

ST Strategies
(Use internal strengths to avoid
external threats)

WT Strategies
(Minimise internal weaknesses and
avoid external threats)

Strategic Management at New Economy in University

Dr. Nuttapon Nimmanphatcharin @ 2003

Siam University

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
following questions:

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
conditions.
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

Strategic Management at New Economy in University

Dr. Nuttapon Nimmanphatcharin @ 2003

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Siam University

Strategy evaluation or performance measures should be established and appropriate monitoring and
control mechanisms put in place.

4 SUMMARY
The study of the definition and process of strategic management and the formulation of strategies for
universities can be organised around four major issues. They are firstly what the university wants to achieve
both qualitatively (mission, vision) and quantitatively (specific market and financial-related objectives) during
a strategic time-horizon. Secondly, how the business should be positioned. Thirdly, creating capabilities calls
for three basic forms of strategic investment. Fourthly, organisation covers not only formal structure, but also
the various processes and systems which will govern the distribution of power; rules and procedures; internal
communication; evaluation and reward, coordination mechanisms, and the management of a corporate culture
fitting the requirements of the region.

Strategic Management at New Economy in University

Dr. Nuttapon Nimmanphatcharin @ 2003

11