Principles of Management: Chapter 6

Planning Strategic Management Process

1.) Establish Mission and Vision Statement

2.) Analyze the enviornment and organizations resources

3.) Establish corporate strategies

4.) Formulate the strategic plan

5.) Carry out strategies and plans

6.) Control process

Analyze the Enviornment and Organizations Resources

SWOT Analysis - strengths (internal), weaknesses (internal), opportunitues (external), threats (external)

Establish Corporate Strategies

1.) Growth & Innovation Strategy - involves expansion strategy

• Ex: Mergers & Acquistitions, products, services, processes

2.) Stability Strategy - maintaining the level of growth of the company strategically

3.) Defensive (Retrenchment) Strategy - involves reduction or shrinking an organization’s efforts in order to not face bankrupcy.

Forming the Strategic Plan

• Single Product Strategy - they sell only one type of product

• Portfolio Strategy - They sell many different types of products (diversification)

• BCG Matrix

BCG Matrix

A tool used by diversified companies to manage the many different products they sell

• Stars - HIGH market share, HIGH market growth

• Cash Cows - HIGH market share, LOW market growth

• Question Marks - LOW market share, HIGH market growth

• Dogs - LOW market share, LOW market growth

Carry Out Strategies and Plans

Positioning Strategy - cost leadership and differentiation

Control Process

Keeping an eye for what’s going on. Monitoring actual performance and comparing it with your actual plan