Strategic Management chapter 1

long range planning

A formalized process of identifying long-term goals, selecting strategies to achieve those goals, and developing policies and plans to implement the strategies. tries to optimize for tomorrow the trends of today

annual objectives provide the basis for

allocating resources

internal strengths and internal weaknesses

an organization's controllable activities that are performed especially well or poorly. They arise in the management, marketing, Finance / accounting, production / operations, research and development, and management information systems activities of a business

how should internal and external factors be stated

as specifically as possible, using numbers, percentages, dollars, and ratios, as well as comparisons overtime to rival firms. Specificity is important because strategies will be formulated and resources allocated based on this information. The more specific the underlying external and internal factors, the more effectively strategies can be formulated and resources allocated

intuition

based on past experiences, judgment, and feelings most people recognize that this is essential to making good strategic decisions

what is a fundamental difference between military and business strategy

business strategy is formulated, implemented, and evaluated with an assumption of competition, whereas military strategy is based on an assumption of conflict

organizations strive to pursue strategies that

capitalize on internal strengths and eliminate internal weaknesses

what are the job titles of stratagists

chief executive officer, president, owner, chair of the board, executive director, Chancellor, Dean, and entrepreneur

mission statement

enduring statements of purpose that distinguish one business from other similar firms. it identifies the scope of a firm's operations and product and Market terms that addresses the basic question that faces all strategist what is our business. when clear, it describes the values and priorities of an organization. not only Broadway charge the future direction of an organization but it also serves as a constant reminder to its employees of why the organization exists and what the founders envisioned when they put their fame and Fortune at risk to breathe life into their dreams

a basic tenet of strategic management is that firms need to formulate strategies to take advantage of

external opportunities and avoid or reduce the impact of external threats

retreats

formal meetings semi annually to discuss an update the firm's vision, mission, opportunities, threats, strengths, weaknesses, strategies, objectives, policies, and performance. These meetings are commonly held off-premises

what can provide major competitive advantages

having fewer fixed assets than rival firms

what does a strategist do

helps an organization gather, analyze, and organize information they attract industry and competitive Trends, develop forecasting models and scenario analysis, evaluate corporate and divisional performance, spot Emerging Market opportunities, identify business threats, and above creative action plans

the strategic management process can be described as an

objective, logical, systematic approach for making major decisions in an organization

vision statement

often considered the first step in strategic planning, preceding even development of a mission statement. this answers the question of what do we want to become as an organization

when should strategy formulation, implementation, and evaluation activities be performed

on a continual basis, not just at the end of the year or semi annually. The strategic management process never really ends

strategy evaluation

phase in which reviewing external and internal factors that are the basis for current strategies occur, measuring performance, and taking corrective actions

external opportunities and threats

refer to economic, social, cultural, demographic, environmental, political, legal, governmental, technological, and competitive Trends and events that could significantly benefit or harm an organization in the future

strategy implementation

requires a firm to establish annual objectives, device policies, motivate employees, and allocate resources so that formulated strategies can be executed. This includes developing a strategy supportive culture, creating an effective organizational structure, redirecting marketing efforts, preparing budgets, not developing and using information systems, and linking employee compensation to organizational performance

annual objectives

short-term Milestones that organizations must achieve to reach long-term objectives. these should be measurable, quantitative, challenging, realistic, consistent, and prioritized. They must also be established at the corporate, divisional, and punctual levels in a large organization. these are especially important in strategy implementation

strategy formulation decisions commit an organization to

specific products, markets, resources, and Technologies over an extended period of time

objectives

specific results that an organization seeks to achieve in pursuing its basic mission. Long term means more than one year. These are essential for organizational success because they provide Direction, Aid and evaluation, creates energy, revealed priority, Focus coordination, and provide a basis for Effective planning, organizing, motivating, and controlling activities. these should be challenging, measurable, consistent, reasonable, and clear

when are long-term objectives particularly important

strategy formulation

what are the three stages of strategic management process

strategy formulation, strategy implementation, and strategy evaluation

what is often called the action stage of strategic management

strategy implementation

what is often considered to be the most difficult stage of strategic management

strategy implementation

strategic planning

synonymous with Strategic Management however mostly refers only to strategy formulation

strategic management

the Art and Science of formulating implementing and evaluating cross-functional decision that enable an organization to achieve its objectives. focuses on integrating management, marketing, Finance & Accounting, Productions and operations, research and development, and information systems to achieve organizational success

empowerment

the act of strengthening employees sense of Effectiveness by encouraging them to participate in decision-making and do exercise initiative and Imagination, and rewarding them for doing so

what activity is most important in the strategic management process

the feedback loop because it enables firms to readily adapt to changing conditions

strategist

the individuals most responsible for success or failure of an organization

policies

the means by which annual objectives will be achieved. These include guidelines, rules, and procedures establish to support efforts to achieve stated objectives. these are God's to decision-making and address repetitive or recurring situations. they may be established at the corporate level and applied to an entire organization, at the end of visual level and apply to a single division, or they may be established at the functional level and applied to a particular operational activities or departments. why can you objectives, they're especially important in strategy implementation because they outlined an organization's expectations of its employees and managers

strategies

the names by which long-term objectives will be achieved. may include Geographic expansion, diversification, acquisition, product development, Market penetration, retrenchment, divestiture, liquidation, and joint ventures.

environmental scanning or also known as industry analysis

the process of conducting research and Gathering and assimilating external information

how are strengths and weaknesses determined

they are determined relative to competitors. relative deficiency or superiority is important information. Also, strengths and weaknesses can be determined by elements of being rather than performance

competitive advantage

this term can be defined as an activity a firm does especially well compared to activities done by rival firms, or any resource a firm possesses that rival firms desire

what is the notion of strategic management

to gain and sustain competitive advantage

how do strategies affect an organization's long-term prosperity

typically for at least five years and this are future-oriented

three important questions to answer in developing a strategic plan

where are we now, where do we want to go, and how are we going to get there

sustained competitive advantage

1. continually adapting to changes and external trends and events and internal capabilities, competencies, and resources 2. effectively formulating, implementing, and evaluating strategies that capitalize on those factors

formulation implementation and evaluation of strategy activities occur at three hierarchical levels in a large organization

corporate, divisional or strategic business unit, and functional

is important to be ______ as possible when determining and stating internal strengths and weaknesses

divisional

strategy formulation

includes developing a vision and a mission, identifying an organization's external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and she's in particular strategies to pursue furthermore it includes issues such as deciding what new businesses to enter, what business is to abandon, whether to expand operations or diversify, whether to enter International markets, whether to merge or form a joint venture, and how to avoid a hostile takeover

the strategic management process is based on the belief that organization should continually monitor

internal and external events in trends so that timely changes can be made as needed