Strategic goals and plans (Strategic plans (Top managers use information…
Strategic goals and plans
Top managers formulate strategic goals that apply to the organisation as a whole over the long term.
Strategic goals include a vision, a mission statement and long term goals.
They are complex and deal with the organisation as a whole
A vision is the picture of the future the organisation seeks to create.
Long-term strategic goals derive from the organisation’s mission statement.
The mission statement answers three important questions:
Top managers use information about the organisation and its environment.
They interpret the opportunities and threats in the business environment and determine their potential impact on the organisation
Strategic plans focus on the organisation as a whole and not on a specific function or operation.
Strategic plans usually refer to a period of more than five years.
Generic strategies include strategies concentrating on cost leadership, differentiation, focussed low cost strategy and focussed differentiation.
Grand strategies (or corporate strategies) identify which businesses the organisation should be in
They determine whether the organisation will expand its present business, buy or start other businesses (growth strategies), or reduce operations by selling or closing parts of the business (decline strategies)
The following are examples of corporate growth strategies:
Market development in which an organisation develops existing markets for its present products more intensively or develops new markets for existing products.
Product development in which the organisation develops new products for existing markets or modifies existing products to win greater approval among customers
Concentration growth in which an organisation directs all its resources and skills to the profitable growth of a single product in a single market.
Innovation in which the organisation constantly improves products or services.
Diversification strategy is when an organisation takes over other organisations and so enter into new activities or when it sets up a completely new entity.
Vertical-integration strategy is where the organisation takes over other organisations, such as those providing raw materials or acting as outlets, with the purpose of ensuring a supply source or a distribution channel
Integration. A horizontal-integration strategy implies that the organisation takes over organisations similar to it.
Related diversification refers to an organisation acquiring another organisation or organisation related to it in terms of market, product or technology.
Unrelated diversification refers to an organisation acquiring another or organisations unrelated to it in terms of product , market or technology.