Thinking Strategically in an Organization

Thinking Strategically in an Organization

According to the Thinking Strategically simulation, "Strategy, in business, is the combination of foresight, planning, and decision-making that prepares an enterprise to achieve long-term goals and manage the consequences of contemporary decisions." A lesson learned was that one needs to properly construct long-term objectives to be able to align to the company's strategic goals. This helped in some development of my strategic plan.

For example, if the CEO of a company wants to establish a strong competitive position and cares less about profits in the short-term, then a possible strategy would be to keep prices low in order to establish the company within the market. In order to arrive at an objective, one must analyze the internal and external environments. External analysis is done at a higher cost because information needs to be gathered and analyzed. Also, external data is not readily available and it may take time to obtain. Internal environmental analysis can be obtained at a fraction of the cost and is usually readily available. One of the most common techniques of internal environmental analysis is a SWOT analysis. Once both environments have been analyzed, one could select objectives that align with the firm's strategies.

The CEO of BJ's wanted to lead the industry in profitability, which would mean increasing profitability from the current 28% level to 38%. In addition, the CEO wants to reduce the manufacturing costs of bikes to under $100.00. The first decision is to decide how much internal and external information is needed to finalize the long-term objective. A good decision would be to get a mixture of consumer and industry research reports. The U.S. Specialty Bicycle Consumers Study is a good choice because it will give information about our customer. Another purchase was the National Specialty Bicycles Retailing Industry Report which will give the industry information as needed.