1.Strategic Management Process10.2

2. What is Strategic Management? Application of the basic planning process at thehighest levels of the company Top management sets goals for theperformance of the company Carefully formulating, implementing, and evaluatingplans and strategies 3. What is Strategic Management? Most important part is developing strategicplans Plans must remain current as changes occur insideand outside the company Involves many levels of management Top level formally develops basic plans Different departments may be asked to develop plansfor their own areas A solid plan guarantees that plans are coordinatedand are supported by everyone in the company 4. Strategic Management Approach Three phases critical to the success of theprocess Formulation Developing the strategic plan Implementation Putting the formulated plan to work Evaluation Continuously evaluating and updating the strategic plan 5. Formulating StrategyDeveloping the grand- and business-levelstrategies to be used by the company Companys strengths/weaknesses andthreats/opportunities shape the strategies First step is to understand the current position ofthe company Identify mission, identify past and present strategies, diagnose the companys past and present performance, set objectives for the companys operation 6. Formulating Strategy Identify the mission statement Outlines why the company exists Describes the companys basic productsand/or services and defines markets andsources of revenue Designed to accomplish several goals andensures a common purpose within thecompany 7. Apples Mission Statement Apple ignited the personal computer revolutionin the 1970s with the Apple II and reinvented thepersonal computer in the 1980s with theMacintosh. Today, Apple continues to lead theindustry in innovation with its award-winningcomputers, OS X operating system and iLife andprofessional applications. Apple is alsospearheading the digital media revolution with itsiPod portable music and video players andiTunes online store, and has entered the mobilephone market this year with its revolutionaryiPhone. 8. Whos 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 worlds most customer- centric company, where customers can find and discover anything they may want to buy online at a great price." 9. Identifying Past and PresentStrategies Companies need to understand andappreciate their corporate history Strategic managers should ask Has past strategy been developed? If not, can past history of the company be analyzedto identify the strategy that has evolved? If yes, has the strategy been recorded in writing? 10. Diagnosing Past and Present Performance A corporate planner must decide if paststrategies worked and if strategic changesare needed by asking: How is the company currently performing? How has it performed during the past fewyears? Is the performance trend moving up or down? 11. Setting Goals Concise statements that provide directionemployees and set standards forachieving the companys strategic plan Established in many areas (see handout) Goals must be reevaluated as theenvironment and opportunities change Multiple goals are used to reflect thedesired performance 12. Policies, Procedures, and Rules Policies are broad general guides to actionthat establish boundaries within whichemployees must operate answering all written customer complaints inwriting within 10 days 13. Policies, Procedures, and Rules Procedures are detailed series of relatedsteps/tasks written to implement a policy Define methods through which policies are achieved the customer service representative must note thecomplaint of Form 622 and forward the yellow copy ofthe form Rules detail specific and definite corporateactions that employees must follow Leave little doubt about what is to be done no smoking in the conference room 14. SWOT Analysis Strengths, Weaknesses, Opportunities,Threats Process that allows companies to evaluateoverall health Internal (SW) and external (OT) Most important result of a SWOT analysisis the ability to draw conclusions about theattractiveness of the companys situationand the need for strategic action 15. Implementing Strategy Action stage of strategic management Managers determine and implement themost appropriate company structure,motivate employees, develop short-rangegoals, and establish functional strategies Strategy must fit with current companypolicies Or conflicting policies must be changed A. T. Cross Company 16. Evaluating and Controlling theStrategic Plan Process of continuously monitoring thecompanys progress toward its long-range goalsand 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 thebases for current strategies Measure performance Take corrective action 17. Evaluating and Controlling the Strategic Plan Emphasis is making the companysmanagers aware of the problems that arelikely to occur and of the actions to take ifthey do arise Plan ahead and avoid disaster Strategic planning and evaluation shouldbe done on a predetermined schedule andas frequently as necessary, determined byinternal and environmental factors