Strategic Management Concepts

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Questions and Answers

One component of a mission statement involves identifying the firm's ______.

customers

A mission statement should reflect the firm’s concern for survival, growth, and ______.

profitability

The ______ of a firm refers to its distinctive competence or major competitive advantage.

self-concept

Concern for ______ is important for firms to ensure they are responsive to social and environmental issues.

<p>public image</p> Signup and view all the answers

Companies often state their mission is to earn a ______, which is more accurately seen as an objective.

<p>profit</p> Signup and view all the answers

A company’s realized strategy is a combination of deliberate planned elements and unplanned __________ elements.

<p>emergent</p> Signup and view all the answers

Strategic management consists of four basic elements: Environmental scanning, strategy formulation, strategy __________, and evaluation and control.

<p>implementation</p> Signup and view all the answers

A strategy evolves through incremental adjustments or dramatic __________ shifts.

<p>major</p> Signup and view all the answers

The strategic management process includes internal and external environment __________.

<p>scanning</p> Signup and view all the answers

Strategic change can occur due to unexpected moves from __________.

<p>competitors</p> Signup and view all the answers

One of the reasons a strategy may change over time is due to shifting buyer needs and __________.

<p>preferences</p> Signup and view all the answers

__________ analysis is a technique used in environmental scanning to assess strengths, weaknesses, opportunities, and threats.

<p>SWOT</p> Signup and view all the answers

The purpose or reason for the organization’s existence is outlined in its __________.

<p>mission</p> Signup and view all the answers

A graphic vision statement paints a ______ of the kind of company that management is trying to create.

<p>picture</p> Signup and view all the answers

A directional vision statement describes the ______ course that management has charted.

<p>strategic</p> Signup and view all the answers

A focused vision statement is specific enough to provide managers with ______ in making decisions.

<p>guidance</p> Signup and view all the answers

A flexible vision statement allows management to adjust to ______ circumstances in markets.

<p>changing</p> Signup and view all the answers

Strategy formulation is a process of investigation, analysis, and decision-making that provides the company with the criteria for attaining a competitive ______.

<p>advantage</p> Signup and view all the answers

A feasible vision statement is within the realm of what the company can reasonably ______ to achieve.

<p>expect</p> Signup and view all the answers

A desirable vision statement indicates why the directional path makes good ______ sense.

<p>business</p> Signup and view all the answers

A comprehensive master approach that states how the corporation will achieve its mission and ______ is called a strategy.

<p>objectives</p> Signup and view all the answers

A broad guideline for decision making that links the formulation of a strategy with its ______ is known as policy.

<p>implementation</p> Signup and view all the answers

An easy to communicate vision statement should be explainable in 5 to 10 ______.

<p>minutes</p> Signup and view all the answers

A vague vision statement is short on specifics about where the company is ______.

<p>headed</p> Signup and view all the answers

A vision statement articulates the ideal description of an organization and outlines its intended ______.

<p>future</p> Signup and view all the answers

An effective and inspirational vision enlists the commitment of the ______.

<p>company</p> Signup and view all the answers

The mission of Disney is to 'create happiness by providing the finest in entertainment for people of all ages, everywhere' and focuses on the company's ______.

<p>vision</p> Signup and view all the answers

A vision statement should be relatively short and ______.

<p>concise</p> Signup and view all the answers

The Mayo Clinic's mission states to provide the best care to every ______ every day.

<p>patient</p> Signup and view all the answers

Conditions in the firm’s external environment and internal ______ influence the forming of a vision statement.

<p>organization</p> Signup and view all the answers

Greenpeace aims to halt environmental abuse and promote environmental ______.

<p>solutions</p> Signup and view all the answers

An effective vision challenges and stretches the ______ of those involved.

<p>people</p> Signup and view all the answers

A mission statement should establish a firm's ______.

<p>individuality</p> Signup and view all the answers

A company's mission is more concrete than its ______.

<p>vision</p> Signup and view all the answers

A strategic vision concerns a firm's future ______ course.

<p>strategic</p> Signup and view all the answers

A mission statement focuses on a firm's present business scope and ______.

<p>purpose</p> Signup and view all the answers

An effective company mission should identify products or services and specify customer ______.

<p>groups</p> Signup and view all the answers

Profit is not 'who we are and ______.'

<p>what we do</p> Signup and view all the answers

Values provide guidance for desired ______ and behaviors of employees.

<p>actions</p> Signup and view all the answers

Managerially, valuable objectives must be challenging, yet ______.

<p>achievable</p> Signup and view all the answers

Financial objectives relate to revenue growth, profitability, and ______.

<p>return on investment</p> Signup and view all the answers

Strategic objectives are related to a firm’s marketing standing and competitive ______.

<p>vitality</p> Signup and view all the answers

The balanced scorecard approach includes both financial and strategic ______.

<p>objectives</p> Signup and view all the answers

Short-term objectives are targets to be achieved ______.

<p>soon</p> Signup and view all the answers

Long-term objectives are targets to be achieved within ______ to 5 years.

<p>3</p> Signup and view all the answers

Strategy forms a comprehensive master approach that states how the corporation will achieve its ______ and objectives.

<p>mission</p> Signup and view all the answers

A policy is a broad guideline for ______-making that links the strategy with its implementation.

<p>decision</p> Signup and view all the answers

Flashcards

Environmental Scanning

Analyzing the internal and external environment to understand strengths, weaknesses, opportunities, and threats (SWOT) affecting the organization.

Strategy Formulation

The process of developing a strategic plan to achieve the organization's vision and mission.

Strategy Implementation

Putting the strategic plan into action.

Evaluation and Control

Monitoring and evaluating the performance of the strategy and making adjustments as needed.

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Vision

The long-term goals and aspirations of the organization.

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Mission

The reason for the organization's existence.

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Realized Strategy

A blend of planned and unplanned actions taken by a company that leads to its actual course of action.

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Unplanned Emergent Elements

The company's deliberate strategy can fail in the market.

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Strategy

A comprehensive plan that details how a company will achieve its mission and objectives.

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Objectives

The desired end results or outcomes of the company's strategic plan.

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Strategy Policy

A broad policy that connects the formulation of a strategy with its implementation.

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Vision Statement

A concise, memorable, and inspiring statement that communicates a company's long-term goals and aspirations. It outlines where the company wants to be in the future.

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Mission Statement

A clear, specific explanation of the company's purpose, target market, and competitive advantage. It focuses on the current business scope and what the company does.

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Slogan

A slogan can be a short, attention-grabbing phrase used to communicate a business's vision in a simple and memorable way.

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Vision in a Slogan

Creating a slogan that captures a company's vision effectively helps to communicate its goals and aspirations concisely to stakeholders, employees, and customers.

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Mission Statement: Scope & Customers

A mission statement should define the specific industries or businesses the company wants to compete in and the customer groups it aims to serve.

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Mission Statement: Individuality

A mission statement should be unique and identify what makes the company different from its competitors.

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Mission Statement: Inspiration

A mission statement should inspire and motivate all stakeholders, including employees, customers, and investors.

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Mission Statement: Ethical Impact

A mission statement's effectiveness is higher when employees share a strong sense of ethics, contributing to a positive and productive work environment.

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Customers in a Mission Statement

Who are the customers that a business serves?

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Products or Services in a Mission Statement

What goods or services does a business provide?

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Markets in a Mission Statement

Where does a business operate geographically?

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Technology in a Mission Statement

The degree to which a business utilizes current technology.

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Philosophy in a Mission Statement

A company's fundamental beliefs about ethical practices, values, and aspirations.

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Graphic vision statement

A vision statement that clearly describes the desired future state of a company and its position in the market. It paints a picture of the kind of company management wants to create, outlining the strategic direction and desired market position.

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Directional vision statement

A vision statement focused on the future. It outlines the strategic path management has chosen and the necessary changes to product, market, customer, and technology to prepare for the future.

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Focused vision statement

Provides specific guidance to managers on decision-making and resource allocation. It should guide the company towards a specific path and avoid broad, ambiguous direction.

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Flexible vision statement

A vision statement that allows for adjustments based on changing market conditions. It balances clear objectives with the flexibility to adapt to evolving customer preferences and technological advancements.

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Feasible vision statement

A vision statement that aligns with the company's capabilities and resources. It should be achievable and realistic, given the company's strengths and limitations.

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Desirable vision statement

A vision statement that clearly articulates why the chosen path is beneficial for the company. It highlights the value proposition and the positive outcomes of achieving the vision.

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Easy to communicate vision statement

A vision statement that is easy to understand and communicate. It should be concise and clear, ideally expressed in a memorable slogan.

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Vague or incomplete vision statement

A vision statement lacking specifics about the company's future direction. It fails to clearly define where the company is heading or the actions needed to get there.

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Desired Actions and Behaviors

Actions and behaviors that employees exhibit when conducting business, guided by company values.

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Financial Objectives

Communicate management's targets for financial performance. Lagging indicators reflecting past decisions.

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Strategic Objectives

Related to a firm's market position and competitive edge. Leading indicators of future financial performance.

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Policy

A broad guideline for decision-making that links strategy formulation with its implementation.

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Long-Term Objectives

Targets to be achieved within 3 to 5 years. Represent long-term performance goals.

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Short-Term Objectives

Targets to be achieved soon. Act as milestones for reaching long-range performance.

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Balanced Scorecard

A set of metrics used to measure performance across financial, customer, internal process, and learning and growth perspectives. It provides a holistic view of company performance.

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Setting Objectives

Converting the vision into measurable goals and targets. Creating yardsticks to track progress and measure performance.

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Study Notes

BPMN 3023 Strategic Management

  • Course name: BPPM 3023 Strategic Management
  • Chapter 1: Introduction to Strategic Management

Phases of Strategic Management

  • Phase 1: Basic financial planning (short-term focus)
  • Phase 2: Forecast-based planning (internal and external analysis)
  • Phase 3: Externally oriented strategic planning (focus on the external environment)
  • Phase 4: Strategic management (combining all aspects)

Phases of Strategic Management (Detailed)

  • Basic financial planning: minimal analysis, internal data, 2-3 weeks, one-year plans
  • Forecast-based planning: more thorough analysis, internal and external data, one month, three to five years plans
  • Strategic planning: external analysis, planning staff, top management, and consultants, throughout the year, five-year plans
  • Strategic management: external and internal environments, lower-level managers, top-level managers, and consultants, throughout the year, five-year plans

Strategic Management vs Strategy

  • Strategic Management: A set of managerial decisions and actions determining long-term corporate performance.
  • Strategy: The set of actions managers take to outperform competitors and achieve superior profitability.

What is Strategy?

  • Choosing how to compete
  • Creating products/services to attract customers
  • Positioning the company in the industry
  • Deploying resources to build competitive capabilities
  • Determining how each business function (R&D, supply chain, production, sales, marketing, distribution, finance, human resources) will operate
  • Achieving the firm's performance targets

Why Strategy Evolves Over Time

  • Unexpected competitor moves
  • Shifting buyer needs/preferences
  • Emerging market opportunities
  • Managers implementing new ideas
  • Evidence that current strategy isn't working

A Company's Strategy (Planned/Unplanned)

  • Deliberate strategy elements (initiatives and continuing strategies)
  • Unplanned reactive elements to changes (emergent strategy elements)
  • Some deliberate strategies may be abandoned through these unplanned changes

Strategic Management Process

  • Internal and external environment scanning
  • Strategy formulation
  • Strategy implementation
  • Evaluation and Control

Basic Model of Strategic Management

  • The process includes environmental scanning, strategy formulation, strategy implementation, and evaluation and control.

Basic Model of Strategic Management (Detailed)

  • Environmental scanning (gathering information) - external (natural, societal, task environments) and internal (structure, culture, resources)
  • Strategy formulation (developing long-range plans) - Mission, objectives, strategies and policies
  • Strategy Implementation (putting the strategy into action) - Programs, Budgets and Procedures
  • Evaluation and Control (monitoring performance) - Performance and feedback/learning processes

Environmental Scanning

  • Monitoring, evaluating, and disseminating information from both the internal and external environments for people within the organization
  • Includes SWOT analysis.

Strategy Formulation

  • Investigation, analysis, and decision making to provide the company with the criteria to attain competitive advantage.
  • Includes defining competitive advantage (strategy), crafting the firm's business strategy, and setting objectives

Stage 1: Developing a Strategic Vision

  • A picture of what the firm wants to be and achieve in the future.
  • The statement should be short, concise, inspirational, consistent with stakeholders' plans, and provide a clear picture of the organization's future.
  • External and Internal conditions affect the vision statement.

Stage 2: Developing a Mission Statement

  • A more concrete description of the firm's vision, stating the businesses in which the firm will compete and the customers it will serve.
  • Inspiring and relevant to stakeholders, developed by top leaders, and highly effective when employees have strong ethics.

Strategic Vision Versus Mission Statement

  • Strategic Vision: Focuses on the future strategic course ("where we are headed")
  • Mission Statement: Focuses on the present business scope and purpose ("who we are, what we do, why").

Developing a Company Mission Statement

  • Clearly describe the company's product(s) or service(s) and buyer needs that are being met
  • Specify the customer target groups and markets being served
  • Specify the approach to meeting customer needs with a clear company identity

Developing a Mission Statement: Components

  • Customers, products/services, markets, technology, concern for survival/growth/profitability

Developing a Mission Statement: Components (Continued)

  • Philosophy, self-concept, concern for public image/community/environment, concern for employees

Strategic Mission, Vision, and Profit

  • Profit is an objective, result of activities, and not the sole purpose of a firm

Linking the Strategic Vision and Mission with Company Values

  • Values provide guidance for desired actions and behavior of employees, focusing on fair treatment, honor, integrity, ethical behavior, innovativeness, teamwork, passion for excellence, social responsibility, and community citizenship.

Stage 3: Setting Objectives

  • Transforming the strategic vision into specific performance targets
  • Using indicators to gauge progress and measure results
  • Creating valuable objectives for comprehensive performance tracking

What Kinds of Objectives to Set

  • Financial Objectives: Indicators of past decisions, relate to growth, profitability, and investment return.
  • Strategic Objectives: Indicators of a firm's future performance, related to its marketing position and competitive vitality.

Short-Term and Long-Term Objectives

  • Short-term Objectives: Achieved quickly, represent milestones or steps in reaching long-term performance
  • Long-term Objectives: Achieved within 3–5 years

Stage 4: Formulate a Strategy

  • A comprehensive approach to achieving the corporation's mission and objectives
  • Maximizing competitive advantages while minimizing disadvantages (corporate, business, and functional levels)

Stage 5: Set a Company Policy

  • A broad guideline that combines strategy formulation and implementation

Stage 3: Strategy Implementation

  • Strategies and policies put into action to develop programs, budgets, and procedures

Stage 3: Evaluation and Control

  • Monitoring organizational activities and performance results
  • Actual performance is compared to desired results through the feedback/learning process

Benefits of Strategic Management

  • Clearer sense of strategic vision
  • Sharper focus on important strategies
  • Improved understanding of rapidly changing environments

Impact of Globalization on Strategic Management

  • International markets are integrated
  • Corporations are more interconnected and modernized

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