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Strategic Management

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Strategic Management Powered By Docstoc
					Prof. Amie Moulik
   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
   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
   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
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
   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 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.
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."
   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?
   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?
   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 are broad general guides to action
    that establish boundaries within which
    employees must operate
    ◦ “answering all written customer complaints in
      writing within 10 days”
   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 XXX 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”
 S trengths,    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
   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
   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
   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