Strategic Management, Mission–Goals, and PEST Analysis

30 vocabulary flashcards covering definitions and key examples for strategy, mission, goals, and PEST analysis as presented in the lecture.

Strategic Management

The integrated process of analyzing, deciding, and acting on a business’s strategy to achieve competitive advantage.

Strategy

A firm’s choice of where to compete and how to win.

“Who I Am” (Self-Definition)

A prerequisite for strategy; clarifies the true nature of the business before setting strategic directions.

Marketing Myopia

A shortsighted focus on products rather than customer needs, a term popularized by Theodore Levitt.

Theodore Levitt

Harvard professor who coined the concept of Marketing Myopia.

Mission

A firm’s raison d’être that states where it is going and guides decision making.

Goals

Specific, measurable targets a firm must achieve to fulfill its mission.

Competitive Advantage

The superior performance outcome a firm seeks through successful strategy implementation.

Strategic Management Process

Sequence: Mission → Goals → External Analysis → Internal Analysis → Strategic Choice → Strategy Implementation → Competitive Advantage.

External Analysis

Assessment of macro and industry conditions outside the firm, including PEST factors.

Internal Analysis

Evaluation of a firm’s resources, capabilities, and core competencies.

Strategic Choice

Selection of a strategy based on insights from internal and external analyses.

Strategy Implementation

Actions and resource allocations necessary to execute the chosen strategy.

PEST Analysis

Framework for scanning Political, Economic, Social-cultural, and Technological factors in the environment.

Francis Aguilar

Harvard scholar who created PEST analysis in 1967.

Political Factors (PEST)

Government‐related influences such as taxation, labor laws, and regulatory restrictions.

Economic Factors (PEST)

Macroeconomic conditions like inflation, interest rates, GDP, household income, and stock prices.

Social-Cultural Factors (PEST)

Demographics, values, and lifestyle trends, e.g., aging population or declining fertility rates.

Technological Factors (PEST)

Advances that affect cost, quality, or entry barriers, such as automation, IoT, and AI.

Industry Definition Error

Strategic mistake of defining one’s business too narrowly (e.g., railroads seeing themselves only as railroad companies).

Railroad vs. Transportation Example

Illustrates the importance of broad business definition to avoid strategic decline.

Hollywood vs. Entertainment Example

Demonstrates Marketing Myopia when film studios focused on movies rather than overall entertainment.

Mission Statement Function

Guides all segments of analysis and ties directly to competitive advantage attainment.

Measurable Goal

A target with clear metrics and timeline—for instance, achieving $400 billion revenue by 2020.

Political Example: Work-Hour Regulation

Korea’s shift from 68-hour to 52-hour workweek, affecting labor costs and operations.

Economic Example: Stock Market Surge

KOSPI’s 30 % rise in 2020, indicating bullish investor sentiment and liquidity.

Social Example: Aging Population

Forecast that more than half of Koreans will be over 52 by 2040, reshaping market demand.

Technological Example: AlphaGo

Google DeepMind’s AI program that defeated Go champion Lee Sedol, showcasing AI advancement.

Technological Pillars of Industry 4.0

Cognitive computing, IoT, cloud, big data analytics, advanced robotics, RFID, and 3D printing.

Mission vs. Vision

Mission states current purpose; vision (e.g., Samsung’s ‘Inspire the World, Create the Future’) outlines aspirational future.

Goal Influence

Goals should shape and be shaped by all elements of the strategic management process.