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Intro of Strategic Management

Intro of Strategic Management

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Published by: aneeza jamil on Nov 28, 2012
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ANEEZA JAMIL ROLL NO. # 13 M.PHIL (Semester 2)


research and development. STAGES OF STRATEGIC MANAGEMENT: The strategic management process consists of three stages: strategy formulation strategy implemention strategic management strategy evaluation . marketing. information system to achieve organizational success.STRATEGIC MANAGEMENT DEFINATION: “Strategic management can be defined as the art and science of formulating. strategic management focuses on integrating management. As the definition implies. implementing. and evaluating cross-functional decisions that enable an organization to achieve its objectives”. production/operation. finance/accounting.

and linking employee compensation to organizational performance. generating alternative strategies. and how to avoid hostile takeover. and choosing particular strategies to pursue”. motivate employees. STAGE 3: Strategy Evaluation The final stage in strategic management is strategy evaluation and control. whether to expand operations or diversify. whether to enter international markets. devise policies. and allocate resources so that formulated strategies can be executed”. preparing budgets. redirecting market efforts. what businesses to abandon.STAGE 1: Strategy Formulation: “Strategy formulation includes developing a vision and mission. All strategies are subject to future modification because internal and external factors are constantly changing. STAGE 2: Strategy Implementation: “Strategy implementation requires a firm to establish annual objectives. Strategy implementation includes developing a strategy-supportive culture. Strategy formulation issue include deciding what new businesses to enter. creating an effective organizational structure. The fundamental strategy evaluation and control activities are:    Reviewing internal and external factors (that are the bases for current strategies) Measuring performance Taking corrective actions . This stage is also called ACTION STAGE. whether to merge or form a joint venture. developing and utilizing information system. determining internal strengths and weaknesses. In the strategy evaluation and control process managers determine whether the chosen strategy is achieving the organization's objectives. identifying organization’s external opportunities and threats. establishing long term objectives. how to allocate resources.

INTEGRATING INTUITION AND ANALYSIS      Intuition is based on past experience. Key Strategic Management Terms Strategists Vision Statements Mission Statements External Opportunities and Threats Policies Annual Objectives Strategies Long-term Objectives Internal Strengths and Weaknesses . most decisions based on intuition prove correct It is not applied in dark -rather based on some symptoms. Although not always correct. Ability to take intuitive decisions varies from manager to manager. helps in making quick decisions. More helpful in situations of uncertainty and no precedence. judgments & feelings.

and organize information Track industry and competitive trends Develop forecasting model Evaluate corporate and divisional performance Vision Statement: Answers the question: “What do we want to become”: It is the first step in strategic planning Oftentimes a single sentence . analyze.our vision is to take care of your vision.may comprise one or few sentences.Strategists: Usually found in high levels of management:     Help organization gather. Mission Statement: Answers the question: “What is purpose of our existence”: It is the second step in strategic planning Often a brief . Mission statement of Business School could be: “Our mission is to impart quality business education” External Opportunities & Threats: Largely beyond the control of a single organization:  Economic  Social  Cultural  Demographic  Environmental Political Governmental Technological Competitive trends & events     .

Time frame is beyond one year:       Objectives state direction of organization Help in evaluation Create synergy through team work Reveal priorities .what to do first Focus coordination .Internal Strengths & Weaknesses: Controllable activities that are performed well or poorly relative to competitors: Based on functional analysis of activities in the firm’s:       Management Marketing Finance/Accounting Production/Operations Research and Development Computer Information systems Organizations strive to pursue strategies that capitalize on strengths and improve weaknesses. Long-Term Objectives: In the long term objectives results to be achieved in pursuing the mission of the organization.whom to coordinate with Provide basis for effective management Strategies: Potential actions that require top management decisions and large amounts of firm’s resources Mechanisms by which long-term objectives are realized:     Geographic expansion Diversification Acquisition Product development Types of Strategies: Business strategies may include: .

Selling a division or part of an organization. thereby improving financial health as a short term measure. Retrenchment. and functional levels Stated in terms of accomplishments for:       Management Marketing Finance/accounting Production/operations Research and development Information systems accomplishments Policies: Important in strategy implementation as the means by which annual objectives will be achieved:    Guide to decision making and address repetitive situations Established at corporate. Liquidation .Selling all of the company’ s assets.Market penetration.increase share in present market and existing products / services through greater marketing efforts. Annual Objectives: Short-term milestones necessary to achieve long-term objectives:   Represent the basis for allocating resources Established at corporate. Also called turn around or re-organizational strategy. in parts for their tangible worth.reverse declining sales and profits by reducing cost & other assets. divisional. . Divestiture. Forming of a temporary partnership or consortium by two or more partners for the purpose of capitalizing on some opportunity. or functional levels Allow consistency & coordination within and between organizational departments. Joint venture. divisional.

Benefits of Strategic Management  Proactive Vs. Reactive: o Initiate and influence activities  Helps shape firm’s own future Principal Benefit: o Formulate better strategies  Systematic. profitability. and rational approach Communication: o Key to successful strategic management   Financial Benefits:     More profitable and successful Improvements in sales. logical. and productivity High-Performing Firms: Systematic planning -fluctuations in external and internal environments Non-financial Benefits: Enhanced awareness of external threats Understanding of competitors’ strategies Increased employee productivity Reduced resistance to change Clear performance-reward relationships Order and discipline to the firm View change as opportunity .

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