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STRATEGIC MANAGEMENT (SM), e.g. a vision statement answers the question…
STRATEGIC MANAGEMENT (SM)
What is strategy management (SM)
:recycle: One of the popular method for running a business which involve an analytical approach to setting goal & managing resources
:recycle:It's also the art & science of formulating, implementing and evaluating cross-functional decision that enable an organizational to achieve its objectives.
:recycle:The sum of strategic planning and strategic thinking. strategic planning is the identification of achievable goals. strategic thinking is the ability to identify the needs of the organizational to achieve goals identified through strategic planning.
3 STAGES IN SM
STRATEGY FORMULATION
:checkered_flag:Stage of developing a vision & mission
:checkered_flag:Identify an organization's external opportunities &threats
:checkered_flag:determine internal strengths & weaknessees
:checkered_flag: establishing long-term objectives
:checkered_flag:generating alternative strategies
:checkered_flag:choose particular strategies to pursue
Strategy Formulation Decisions
decide what new businesses to enter
what businesses to abandon
whether to expand operations or diversify
whether to enter international markets
whether to merge or form to joint venture
How to avoid a hostile takeover
STRATEGY IMPLEMENTATION
It requires firms/organizations to establish annual objectives, devise policies, motivate employees, allocate resources to ensure formulated strategies can be executed. O
STRATEGY EVALUATION
The stage of determining which strategies are not working well
Consist of 3 fundamental activities
reviewing external & internal factors that are bases for current strategies
measuring performance
taking corrective actions
BENEFIT FOR APPLYING SM
:<3:It helps an organization to be more proactive that reactive in shaping its own future.
:<3:It allows an organization to initiate and influence firm's objective.
:<3:It increases managerial awareness. It means looking forward the companies future, for example if the manager do this consistently , they will be more aware of the industry trends and challenges by implementing strategy planning and thinking. the will better prepared for the phase future challenges.
FINANCIAL BENEFITS
:check: It significantly can make improvement in sales, profitability, and productivity compared to firm without systematic planning activities.
:check:High-performing firms tend to do systematic planning to prepare for future fluctuations in their external and internal environments.
NONFINANCIAL BENEFITS
:check:Enhanced awareness of external threats
:check:Improved understanding of competitors' strategies
:check:Reduce resistance to change.
e.g. a vision statement answers the question "what do we want to become?"
& mission "what is our business?"
e.g. economic, social, cultural, demographic, evironmental, political, lega;, governmental, technological or events that benefit or harm to firm.
i.e. organization's controllable activities that are performed especially well / poorly e.g. marketing is moving rapidly to the internet.
refers to specific results that an organization seek to achive in pursuing it mission. Long term means more than 1 year.
It is strategic planning which refers to the process of establishing the organization, mission, objective and choosing among alternative strategy.
It enable an organization to evaluate its resources, allocates budgets & determine the most effective plan for maximizing ROI (return on investment.
defined as the manner in which an organization should develop, utiliza & amalgamate organization stucture, control systems,& culture to follow strategies that lead to competitive advantage and better performance
strategy evaluation is as significant as strategy formulation because it throws light on the efficiency and effectiveness of the comprehensive plans in achieving the desired results.