Strategic Management: Environmental Scanning and SWOT Analysis

Importance of Capstone Course

• A Ford Foundation report recommends a capstone course in business schools to integrate knowledge across fields like marketing, finance, and accounting.
• This course helps students develop better ideas to address complex business problems.

Characteristics of Strategic Management

• Strategic management is a systematic phenomenon involving a series of action plans.
• It is multidisciplinary, involving marketing, finance, HR, and operations.
• It is hierarchical, with corporate, business unit, and functional strategies.

Dynamic and Multidimensional Nature

• Strategic management is dynamic, requiring adaptation to environmental changes.
• It is multidimensional, involving vision, objectives, and resources for implementation.

Strategic Management Process

• The process involves interrelated stages of analysis to achieve a goal.
• Changes in one component affect other components.
• Strategy formulation and implementation are sequential.

Environmental Scanning

• Environmental scanning involves monitoring, evaluating, and disseminating information from internal and external environments.
• Its purpose is to identify strategic factors that determine a corporation's future.
• SWOT analysis is a simple way to conduct environmental scanning.

Internal and External Environments

• Internal environment consists of variables within the organization, such as structure, culture, and resources.
• External environment consists of opportunities and threats outside the organization, such as technology, legal factors, and competitors.

Policies and Levels of Strategy Formulation

• Policies refer to instructions for strategy formulation and implementation.
• There are three levels of strategy formulation: corporate, business, and functional.

Strategy Implementation and Guidelines

• Effective implementation is crucial for success.
• Guidelines for effective strategic management include: making it a people process, keeping it simple, welcoming bad news, and being open-minded.

Factors That Shape a Company's Strategy

• Societal, political, regulatory, and citizenship considerations affect strategy.
• Competitive conditions and industry attractiveness also play a vital role in shaping a strategy.