Group 6 Strategic Management Strategic management is the process where organization managers reach the goals and aspirations of the organization on behalf of its owners. This is done through formulation and implementation of ways and methods to fulfill the organizational goals and objectives (Brian, 2011). This is done with in-depth consideration of both the internal and external environments that the organization operates in, in order to allow the organization make the right decisions. Strategic management is an important element that firms must put together through strategic thinking as well as strategic planning (Nag, R., Hambrick & Chen, 2007). In order for a firm to compete within its industry, it must plan and relate to the industry Strategic scaffolding refers to the process where the strategies are laid down on paper and they are closely monitored and compared to their actual execution. Any disparities between the ‘paper’ and executed strategies are noted and rectified. Through strategic scaffolding, an organization is able to construct and reconstruct its strategies with the emerging trends within the industry. This can be prompted by unavoidable changes such as technological revolution and globalization, new entrants among other forces. Therefore, these new factors should not lure the organization into changing the goals, but in the contrary, should slightly change the way to reach to the goals. Most organizations are unable to create a long-term strategy that would last it over five years, and over that period, the new forces it to change the course to reach the same destination. Organizations should be ready to change some of their designated courses to ensure that there is little change in course towards the actual goals, both in long term and in short term. In real terms, strategic scaffolding does not eliminate the older strategy, but rather improves it, or adds a new element to the original Among the first is the creation of a composite portrait that comprises of three parts, verbal, numeral and pictorial. The verbal element is known as a maxim. While organizations follow a slogan to appeal to their customers, a maxim is a statement that encourages the organization workforce to work hard to achieve the set goals. The second element is the metric to represent the numeric communication. This is a numeric representation of the goals that the organization wishes to achieve through their strategy. For instance, Google uses 70-20-10 as their model to determine the level of resource allocation to their core business (70%), related projects (20%) and unrelated projects (10). Finally, the composite has the image, which shows how the strategy would achieve the set goals. The composite portrait delivers comprehensive information to the workforce on a small surface in a concept known as corporate circles. The final composite portrait is compared to the actual scaffolding matrix to determine whether all the information in the latter has been
Michael Porter’s Five Forces is a model used to explain how the factors of the industry influence strategies and provide competitive advantages for organizations. The first force, a threat of entry, determines potential new entrants to the industry. This may give existing firms the opportunity to get ahead of potential competitors before they enter the market and create barriers for potential entrants. The rivalry is the second force, which drives organizations’ strategies to imitate current competitors’ strategies. The threat of substitute products is a force that affects the financial strategies of firms.
Companies utilize various strategies to maintain their relevancy and profitability in a competitive marketplace. However, the initial strategies are crucial for businesses seeking success and longevity by allowing the company to create the framework for what the company looks to achieve. The desired outcome or company’s vision is only one aspect of planning, which requires coordination through other means such as missions, goals, and objectives to allow for the best probability of achieving the company’s apparitions.
Arthur, A., Thompson, Margaret, A., Peteraf, John, E. Gamble, A., J., Strickland III. (2014). Crafting & Executing Strategy: The Quest for Competitive Advantage 19e: Concepts & Cases. C6-C25.
Numerous definitions of strategy exist, in most circumstances strategy can loosely be explained as an overall plan of deployment of resources to ascertain a favourable position within a market (Zablah, Bellenger and Johnston 2004; Grant 1994, p 14). Further, imbedded in many successful organisations are strategies, the importance of which is to remain relevant in the market, and successful in the various attributes of business; profiteering, employee motivation, maintaining sustainable core competencies, effectiveness in operation, or efficiency in the conduction of operations. Therefore challenges involved in the formulation and implementation of a strategy can revolve around the overall external market, as well as internal
Development strategies help the management to balance the resources according to the market opportunities in each business area. Top managers responsible for formulating the corporate strategy should look several years ahead to choose the right and consistent direction for the organization that will accomplish the organization’s long- term goals. There are two main types of strategies based on stability and diversification principles. While in stability strategy, management keeps the status quo if the company is doing well and does not take risks associated with more massive growth, diversification strategy, on the contrary it tries to affect growth through the development of new areas which may differ from current businesses.
Strategic management is the ongoing process of ensuring a competitively superior fit between the organization and its ever-changing environment (Kreitner, G13). Strategic management serves as the competitive edge for the entire management process. It effectively blends strategic planning, implementation, and control. Organizations that are guided by a coherent strategic framework tend to execute even the smallest details of their mission in a coordinated fashion. The strategic management process includes the formulation of a strategy/strategic plans, implementation of the strategy, and strategic control. A clear statement of the organizational mission serves as the focal point for the entire planning process. People inside and outside the organization are given a general idea of why the organization exists and where it is headed. Working from the mission statement, management formulates the organization's strategy, a general explanation of how the organization's mission is to be accomplished. Then general intentions are translated into more concrete and measurable plans, policies, and budget allocations. Implementation is the most important part of the strategy. Strategic plans must be filtered down to lower levels to be success. Strategic plans can go astray, but a formal control system helps keep strategic plans on track. In the strategic management process general managers who adopt a strategic management perspective appreciate that strategic plans require updating and fine-tuning as conditions change. Given today's competitive pressures, management cannot afford to let strategic plans sit as is. A strategic orientation encourages farsightedness. Sun Microsystems Inc. is one company that developed a strategy to become the competitive leader and become the most reliable in the net business. I will explain how Sun's strategy integrates their marketing, management, technology, and service functions into one effective strategy. First I'll discuss who Sun is and what encouraged them to develop their strategy.
Strategic management is a long-term process aimed at achieving organizational goals. Strategy is the employment of resources to gain an objective. Strategic planning and implementation goes far beyond the goals of one leader (Shafritz
Throughout the global economic environment the desire to out-perform the competition is always present. In every situation, the companies who do better are the ones with superior strategy (Rothaermel, 2013). Strategic management is therefore important in every company, no matter what industry or market they operate in; and as stated by M. Carpenter and G. Sanders, 2013, is described as "The process by which a firm manages the formulation and implementation of its strategy". Strategic management is a constant topic under discussion with different schools of theorists with different beliefs and attitudes which is described as "A tense array of disagreement" (Rees, 2012).
Along with the rapid development of economy and society, the companies have to own skills to adapt, cater, and transfer new knowledge, and try to modify their activities to reflect insights. Strategic management evolves
The four key approaches to corporate strategy is described as following. 1) A growth strategy is defined to increase the size and intention of a corporate’s operation by expanding through external partnership in joint ventures, mergers and acquisitions, strategic alliances which may provide faster turn around solution meeting the objective. It can be also designed through internal efforts to develope organic growth via expanding new business units with new technology on new products development or new different operation models in driving new distribution of sales, market penetration and expansion. 2) A retrenchment strategy is designed to downsize a corporate’s business scale and scope due to the change of companies’ direction, market or political environment. It may require major restructuring on cutting down labor forces, production facilities, phase out the old or declining business units, reducing liabilities or diverting overhead cost to focus on other new business interests. 3) A stability strategy is designed to protect against any change to meet the companies’ objectives and the shareholders interest. Examples, it may be limited by licenses, quotas or regulations on selling cigarette, liquor, textile, etc. It may be also related to interim strategy to stable the business from excess capacity of supply like steel or mining
If asked what strategic planning is one could interpret it as simply a road map that can guide the organization in the right direction. It is very unlikely that an organization would know which direction to take without a sense of direction. Managers are faced every day with decisions that have a major impact on the direction the organization must take, therefore, strategic planning can play an important role in guiding managers in the right direction. In other words strategic planning is a tool that management can use to give them a sense of direction that will guide them in doing a better job and to ensure that all the members of the organization are working toward the same goals
According to Lamb (1984), “Strategic management is an ongoing process that assesses the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.” [1]
What I benefit from this course strategy management class is knowing. The strategic management is consisting of the analysis, decisions, and actions an organization undertakes to create and sustain competitive advantages. strategic management analyses. concern with overall objectives, involves multiple stakeholders, incorporates short and long term perspectives, recognizes tradeoffs between effectiveness and efficiency. The strategic management analysis, formulation, and implementation the challenge managers face of both aligning resources to take advantage of existing product markets as well as proactively exploring new opportunities.
Strategic management is the way of implementing different business strategies and plans to attain certain specific aims and objectives. It involves collection of decisions and different rules and policies that tend to define the results that are generated in the form of better business performance. For undertaking these activities, management should possess an in depth understanding and be able to assess the general and competitive external and internal business environment to take proper business decisions (Cornelis, 2010). McDonalds is an organization that offers a range of products and services in a very effective manner that makes it a market leader in providing fast food services all over the world. By enforcing suitable strategies, McDonalds can increase its level of sales and will also help in upgrading as well as sustaining the market by acquiring competitive advantage (Schoenberg, Collier and Bowman, 2013).
The four steps that lead managers and the firm through the strategic planning process are first defining the company’s mission, then setting objectives and goals, next designing a business portfolio and lastly developing functional plans. The first step involves focusing on consumers’ needs and wants. Setting forth a market oriented mission that organizations want to reach based on consumers of the environment. After finding the mission, organizations then proceed to put together supportive objectives for every level of management to help achieve its mission. Next the company has to design a business portfolio evaluating all of its current business and future business by coming up with