Basic Concepts Of Strategic Management (Part1)

refers to a unique plan designed to achieve a competitive position in the market.

strategy

consists of analyses, decisions, and actions, an organization undertakes to create, implement, and sustain competitive advantages.

Strategic Management

Strategic Management is concerned with the analysis of strategic goals (mission, vision, and strategic objectives) along with the internal and external environments of the organization.

Analyses

Strategic decisions address two (2) basic questions: What industries should we compete in? And how should we compete in those industries?

Decisions

Strategic actions require leaders to allocate necessary resources and to bring the intended strategies to reality.

Actions

This perspective refers to how efforts must be directed at what is best for the total organization, not just a single functional area.

Directs the organization toward overall goals and objectives.

Stakeholders are those individuals, groups, and organizations interested in the organization's success, including owners, employees, customers, suppliers, the community at large, and so on.

Includes multiple stakeholders in decision-making

Needs to incorporate short-term and long-term perspectives

Managers must maintain both a vision for the future of the organization and a focus on its present operating needs.

In this situation, what are the correct defination answer? Operations may decide to schedule long production runs of similar products to lower unit costs. However, the standardized output may counter what the marketing department needs to appeal to a demanding target market.

Directs the organization toward overall goals and objectives

If the overwhelming emphasis is on generating profits for the owners, employees may become isolated, customer service may suffer, and the suppliers may resent demands for pricing concessions.

Includes multiple stakeholders in decision-making

Managers must maintain both a vision for the future of the organization and a focus on its present operating needs.

Needs to incorporate short-term and long-term perspectives

In this situation,  If a company has a three-to-five-year plan, this long-term plan should have sequences of short-term plans. Once the long-term goal is defined, management must define the short- term steps necessary to achieve it.

Needs to incorporate short-term and long-term perspectives

It is the difference between doing the right thing (effectiveness) and doing things right (efficiency).

Recognizes trade-offs between efficiency and effectiveness

In this situation, what are the correct defination answer? Managers must make many trade-offs. In doing so, managers must allocate and use resources wisely (efficiency) but still direct their efforts toward attaining overall organizational objectives (effectiveness).

Recognizes trade-offs between efficiency and effectiveness

During this phase, organizations emphasize preparing and meeting annual budgets.

Phase 1: Basic financial planning

During this phase, organizations usually extend time frames covered by the budgeting process (3-5 years).

Phase 2: Forecast-based planning

During this phase, organizations attempt to understand basic marketplace phenomena.

Phase 3: Externally oriented planning

During this phase, the top management organizes planning groups of managers and key employees from various departments and workgroups.

Phase 4: Strategic management

This strategy defines the markets and business in which a company will operate.

Corporate-level strategy

This strategy emphasizes strengthening the company’s competitive position of products or services.

Business level strategy

This strategy is formulated to achieve some objectives of a business unit by maximizing resource productivity.

Functional level strategy

In this situation, what are the correct defination answer? Newspapers slowly adapt to the current technological trends because most news and information are already available via the Internet. Other newspaper companies may perceive that some people are still willing to pay for news delivered daily on a piece of paper.

Benefit

This strategy is usually created at the field level to achieve immediate objectives.

Operating level strategy

It pertains to the value offered by a product or service to the market.

Benefit

It pertains to a selected group of customers within a business' available market at which a business aims its marketing efforts and resources.

Target market

In this situation, what are the correct defination answer? Newspapers' target market is drifted towards older people who are not comfortable or capable of getting their news online.

Target market

It pertains to the rivalry between companies that sell similar goods and services.

Competition

In this situation, what are the correct defination answer? Newspaper companies thought their competition was with other newspaper companies until they realized it was the advent of modernization because of the Internet.

Competition

This pertains to the strategy of a company that involves producing a product or providing a service at a lower cost than its competitors.

Cost advantage

In this situation, what are the correct defination answer? A global company that employs cost advantage is Unilever, which is influenced by its large operation and massive presence in the market.

Cost advantage

This pertains to a company's strategy that involves marketing the qualities of a product that sets it apart from other similar products and uses that difference to drive consumer choice.

Differentiation strategy

In this situation, what are the correct defination answer? A global company that employs a differentiation strategy is Apple, which creates its operating system (IOS) that distinguishes its product as superior apart from its competitors.

Differentiation strategy