Professional Documents
Culture Documents
The Nature of
Strategic
Management
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strategic Management
Chapter Objectives
1. Describe the strategic-management
2. Define and give examples of key terms in
strategic management.
3. Discuss the nature of strategy formulation,
implementation, and evaluation activities.
4. Discuss the strategic Management model
5. Describe the benefits of good strategic
management.
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1.1.What is Strategy?
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Defining Strategic Management
Strategic management
The art and science of formulating,
implementing, and evaluating cross-functional
decisions that enable an organization to achieve
its objectives.
As this definition implies, strategic management
focuses on integrating management,marketing,
finance/accounting,production/operations,
research and development, and information
systems to achieve organizational success.
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1.2. Stages of Strategic
Management
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Stages of Strategic Management
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Strategy Formulation
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1.3. Key Terms in Strategic Management
Competitive Strategists
advantage the individuals
anything that a firm does who are most
especially well compared responsible for the
to rival firms success or failure
When a firm can do
of an organization
something that rival firms Strategists help an
cannot do, or
organization gather,
owns something that
analyze, and organize
rival firms desire. information
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Key Terms in Strategic Management
Vision statement
answers the question “What do we want to
become?”
often considered the first step in strategic
planning
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Key Terms in Strategic Management
Mission statements
enduring statements of purpose that
distinguish one business from other similar
firms
identifies the scope of a firm’s operations in
product and market terms
addresses the basic question that faces all
strategists: “What is our business?”
A mission statement broadly charts the future
direction of an organization.
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Key Terms in Strategic Management
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Cont...
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Key Terms in Strategic Management
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Key Terms in Strategic Management
Strategies
the means by which long-term objectives will be
achieved
they may include geographic expansion, diversification,
acquisition, product development, market penetration,
retrenchment, divestiture, liquidation, and joint ventures
A strategy of a corporation forms a comprehensive master plan
stating how the corporation will achieve its mission and
objectives.
It maximizes competitive advantage and minimizes competitive
disadvantage.
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Key Terms in Strategic Management
Annual objectives
short-term milestones that organizations must achieve
to reach long-term objectives.
Policies
the means by which annual objectives will be
achieved
include guidelines, rules, and procedures
established to support efforts to achieve stated
objectives
guides to decision making and address repetitive
or recurring situations.
Broad guidelines for decision making that link the formulation
of strategy with its implementation.
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Key Terms in Strategic Management
Programs
A program is a statement of the activities or steps
needed to achieve a single-use plan (e.g.
restructuring the firm, changing the company’s
culture, or starting a new research effort).
Procedures
procedures are a system of sequential steps that
describe in detail how a particular task or job is to
be done.
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1.4. Strategic-Management
Model
Resource-based Model
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1. I/O Model
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2. Resource-Based Model
The Resource-Based model suggests that
above-average returns for any firm are
largely determined by characteristics inside
the firm.
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1.5. Benefits of Strategic
Management
1. Financial Benefits
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Nonfinancial Benefits
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