Thought-Provoking Questions

ØWhat are the foundations of strategic competitiveness?

ØWhat is the strategic management process?

ØWhat types of strategies are used by organizations?

ØHow are strategies formulated?

ØWhat are current issues in strategy implementation?

Study Question 1: What are the foundations of strategic competitiveness?

ØBasic concepts of strategy:

–Competitive advantage — operating with an attribute or set of attributes that allows an organization to outperform its rivals.

–Sustainable competitive advantage — one that is difficult for competitors to imitate.

–Strategy — a comprehensive action plan that identifies long-term direction for an organization and guides resource utilization to accomplish organizational goals with sustainable competitive advantage.

–Strategic intent — focusing all organizational energies on a unifying and compelling goal.

–Strategic management — the process of formulating and implementing strategies to accomplish long-term goals and sustain competitive advantage.

Defining Strategic Management

Strategic management is the art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives

Strategic management is used synonymously with the term strategic planning.

Sometimes the term strategic management is used to refer to strategy formulation, implementation, and evaluation, with strategic planning referring only to strategy formulation.

the strategic plan is a company’s game plan.

A strategic plan results from tough managerial choices among numerous good alternatives, and it signals a commitment to specific markets, policies, procedures, and operations.

Stages of Strategic Management

Strategy formulation

• includes developing a vision and mission, identifying an organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue

• Deciding what new businesses to enter,
• What businesses to abandon,
• How to allocate resources,
• Whether to expand operations or diversify,
• Whether to enter international markets,
• Whether to merge or form a joint venture,
• How to avoid a hostile takeover.
• Strategy implementation
  • requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed
  • often called the action stage
• Strategy evaluation
  • reviewing external and internal factors that are the bases for current strategies, measuring performance, and taking corrective actions

    Stages of Strategic Management

    Strategy formulation

  • includes developing a vision and mission, identifying an organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue
  • Deciding what new businesses to enter,
  • What businesses to abandon,
  • How to allocate resources,
  • Whether to expand operations or diversify,
  • Whether to enter international markets,
  • Whether to merge or form a joint venture,
  • How to avoid a hostile takeover.
  • Strategy implementation
    • requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed
    • often called the action stage
  • Strategy evaluation
    • reviewing external and internal factors that are the bases for current strategies, measuring performance, and taking corrective actions

      Stages of Strategic Management

      Strategy formulation

    • includes developing a vision and mission, identifying an organization’s external opportunities and threats, determining internal strengths and weaknesses, establishing long-term objectives, generating alternative strategies, and choosing particular strategies to pursue
    • Deciding what new businesses to enter,
    • What businesses to abandon,
    • How to allocate resources,
    • Whether to expand operations or diversify,
    • Whether to enter international markets,
    • Whether to merge or form a joint venture,
    • How to avoid a hostile takeover.
    • Strategy implementation
      • requires a firm to establish annual objectives, devise policies, motivate employees, and allocate resources so that formulated strategies can be executed
      • often called the action stage
    • Strategy evaluation
      • reviewing external and internal factors that are the bases for current strategies, measuring performance, and taking corrective actions