Business Policies and Strategic Management by oyn17892

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									Strategic Management
       Process
        10.2
What is Strategic Management?
• Application of the basic planning process at the
  highest levels of the company
• Top management sets goals for the
  performance of the company
  – Carefully formulating, implementing, and evaluating
    plans and strategies
What is Strategic Management?
• Most important part is developing strategic
  plans
  – Plans must remain current as changes occur inside
    and outside the company
• Involves many levels of management
  – Top level formally develops basic plans
  – Different departments may be asked to develop plans
    for their own areas
  – A solid plan guarantees that plans are coordinated
    and are supported by everyone in the company
 Strategic Management Approach
• Three phases critical to the success of the
  process
  – Formulation
     • Developing the strategic plan
  – Implementation
     • Putting the formulated plan to work
  – Evaluation
     • Continuously evaluating and updating the strategic
       plan
          Formulating Strategy
Developing the grand- and business-level
  strategies to be used by the company
• Company’s strengths/weaknesses and
  threats/opportunities shape the strategies
• First step is to understand the current position of
  the company
   – Identify mission, identify past and present strategies,
     diagnose the company’s past and present
     performance, set objectives for the company’s
     operation
        Formulating Strategy
• Identify the mission statement
  – Outlines why the company exists
  – Describes the company’s basic products
    and/or services and defines markets and
    sources of revenue
  – Designed to accomplish several goals and
    ensures a common purpose within the
    company
Apple’s Mission Statement
• Apple ignited the personal computer revolution
  in the 1970s with the Apple II and reinvented the
  personal computer in the 1980s with the
  Macintosh. Today, Apple continues to lead the
  industry in innovation with its award-winning
  computers, OS X operating system and iLife and
  professional applications. Apple is also
  spearheading the digital media revolution with its
  iPod portable music and video players and
  iTunes online store, and has entered the mobile
  phone market this year with its revolutionary
  iPhone.
   Who’s Mission Statements?
1. "To bring inspiration and innovation to every
   athlete in the world."
2. "To enable people and businesses throughout
   the world to realize their full potential."
3. “. . .seeks to be the world’s most customer-
   centric company, where customers can find
   and discover anything they may want to buy
   online at a great price."
    Identifying Past and Present
              Strategies
• Companies need to understand and
  appreciate their corporate history
• Strategic managers should ask
  – Has past strategy been developed?
    • If not, can past history of the company be analyzed
      to identify the strategy that has evolved?
    • If yes, has the strategy been recorded in writing?
    Diagnosing Past and Present
           Performance
• A corporate planner must decide if past
  strategies worked and if strategic changes
  are needed by asking:
  – How is the company currently performing?
  – How has it performed during the past few
    years?
  – Is the performance trend moving up or down?
            Setting Goals
• Concise statements that provide direction
  employees and set standards for
  achieving the company’s strategic plan
• Established in many areas (see handout)
• Goals must be reevaluated as the
  environment and opportunities change
• Multiple goals are used to reflect the
  desired performance
Policies, Procedures, and Rules
• Policies are broad general guides to action
  that establish boundaries within which
  employees must operate
  – “answering all written customer complaints in
    writing within 10 days”
Policies, Procedures, and Rules
• Procedures are detailed series of related
  steps/tasks written to implement a policy
   – Define methods through which policies are achieved
   – “the customer service representative must note the
     complaint of Form 622 and forward the yellow copy of
     the form…”
• Rules detail specific and definite corporate
  actions that employees must follow
   – Leave little doubt about what is to be done
   – “no smoking in the conference room”
            SWOT Analysis
• Strengths, Weaknesses, Opportunities,
  Threats
• Process that allows companies to evaluate
  overall health
  – Internal (SW) and external (OT)
• Most important result of a SWOT analysis
  is the ability to draw conclusions about the
  attractiveness of the company’s situation
  and the need for strategic action
      Implementing Strategy
• Action stage of strategic management
• Managers determine and implement the
  most appropriate company structure,
  motivate employees, develop short-range
  goals, and establish functional strategies
• Strategy must fit with current company
  policies
  – Or conflicting policies must be changed
• A. T. Cross Company
    Evaluating and Controlling the
            Strategic Plan
• Process of continuously monitoring the
  company’s progress toward its long-range goals
  and mission
• Managers should ask:
  – Does the grand strategy need revising?
  – Where are problems likely to occur?
• Basic strategy evaluation strategies:
  – Review external and internal factors that are the
    bases for current strategies
  – Measure performance
  – Take corrective action
   Evaluating and Controlling the
           Strategic Plan
• Emphasis is making the company’s
  managers aware of the problems that are
  likely to occur and of the actions to take if
  they do arise
• Plan ahead and avoid disaster
• Strategic planning and evaluation should
  be done on a predetermined schedule and
  as frequently as necessary, determined by
  internal and environmental factors

								
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