Page 44 -

10 PART 1 • OVERVIEW OF STRATEGIC MANAGEMENT

(1) continually adapting to changes in external trends and events and internal capabilities,
competencies, and resources; and by (2) effectively formulating, implementing, and evaluat-
ing strategies that capitalize upon those factors. For example, newspaper circulation in the
United States is steadily declining. Most national newspapers are rapidly losing market
share to the Internet, and other media that consumers use to stay informed. Daily newspaper
circulation in the United States totals about 55 million copies annually, which is about the
same as it was in 1954. Strategists ponder whether the newspaper circulation slide can be
halted in the digital age. The six broadcast networks—ABC, CBS, Fox, NBC, UPN, and
WB—are being assaulted by cable channels, video games, broadband, wireless technologies,
satellite radio, high-definition TV, and digital video recorders. The three original broadcast
networks captured about 90 percent of the prime-time audience in 1978, but today their
combined market share is less than 50 percent. 10
An increasing number of companies are gaining a competitive advantage by using the
Internet for direct selling and for communication with suppliers, customers, creditors, part-
ners, shareholders, clients, and competitors who may be dispersed globally. E-commerce
allows firms to sell products, advertise, purchase supplies, bypass intermediaries, track inven-
tory, eliminate paperwork, and share information. In total, e-commerce is minimizing the
expense and cumbersomeness of time, distance, and space in doing business, thus yielding
better customer service, greater efficiency, improved products, and higher profitability.
The Internet has changed the way we organize our lives; inhabit our homes; and relate
to and interact with family, friends, neighbors, and even ourselves. The Internet promotes
endless comparison shopping, which thus enables consumers worldwide to band together
to demand discounts. The Internet has transferred power from businesses to individuals.
Buyers used to face big obstacles when attempting to get the best price and service, such as
limited time and data to compare, but now consumers can quickly scan hundreds of vendor
offerings. Both the number of people shopping online and the average amount they spend
is increasing dramatically. Digital communication has become the name of the game in
marketing. Consumers today are flocking to blogs, short-post forums such as Twitter,
video sites such as YouTube, and social networking sites such as Facebook, MySpace, and
LinkedIn instead of television, radio, newspapers, and magazines. Facebook and MySpace
recently unveiled features that further marry these social sites to the wider Internet. Users
on these social sites now can log on to many business shopping sites with their IDs from
their social site so their friends can see what items they have purchased on various shop-
ping sites. Both of these social sites want their members to use their IDs to manage all their
online identities. Most traditional retailers have learned that their online sales can boost
in-store sales as they utilize their Web sites to promote in-store promotions.

Strategists
Strategists are the individuals who are most responsible for the success or failure of an orga-
nization. Strategists have various job titles, such as chief executive officer, president, owner,
chair of the board, executive director, chancellor, dean, or entrepreneur. Jay Conger, profes-
sor of organizational behavior at the London Business School and author of Building
Leaders, says, “All strategists have to be chief learning officers. We are in an extended period
of change. If our leaders aren’t highly adaptive and great models during this period, then our
companies won’t adapt either, because ultimately leadership is about being a role model.”
Strategists help an organization gather, analyze, and organize information. They track
industry and competitive trends, develop forecasting models and scenario analyses, evaluate
corporate and divisional performance, spot emerging market opportunities, identify business
threats, and develop creative action plans. Strategic planners usually serve in a support or
staff role. Usually found in higher levels of management, they typically have considerable
authority for decision making in the firm. The CEO is the most visible and critical strategic
manager. Any manager who has responsibility for a unit or division, responsibility for
profit and loss outcomes, or direct authority over a major piece of the business is a strategic
manager (strategist). In the last five years, the position of chief strategy officer (CSO) has
emerged as a new addition to the top management ranks of many organizations, including
Sun Microsystems, Network Associates, Clarus, Lante, Marimba, Sapient, Commerce One,