12 Questions
What is STEP 1 of the strategic management process?
Identifying the organization’s current mission, goals, and strategies
Which type of analysis is included in the SWOT analysis?
External and internal analysis
What does a mission statement define?
The organization's purpose
Which of the following is NOT a component of a mission statement?
Product pricing strategies
What is the purpose of conducting an external analysis in the SWOT analysis?
To assess opportunities and threats
Why is it important for managers to conduct a SWOT analysis?
To make informed strategic decisions
What is the purpose of managers conducting an external analysis in STEP 2?
Pinpoint opportunities and threats in the environment
How are an organization's resources different from its capabilities?
Resources are assets used for production, while capabilities are skills needed in business
What is the main purpose of conducting an internal analysis?
Determine the firm's core competencies
What do managers identify after completing an internal analysis?
Organizational strengths and weaknesses
What is the combined external and internal analysis of an organization called?
SWOT analysis
What should managers do after completing the SWOT analysis?
Formulate appropriate strategies
Study Notes
Strategic Management Process
- The strategic management process consists of six steps: strategy planning, implementation, and evaluation.
- Even the best strategies fail if not implemented or evaluated properly.
Step 1: Identify the Organization's Current Mission, Goals, and Strategies
- The mission is a statement of the organization's purpose.
- Defining the mission helps managers identify what the organization is in business to do.
- Examples of mission statements: Avon's mission is to "be the company that best understands and satisfies the product, service, and self-fulfillment needs of women on a global level," and the National Heart Foundation of Australia's mission is to "reduce suffering and death from heart, stroke, and blood vessel disease in Australia."
- Components of a mission statement:
- Target customers
- Markets
- Goals and strategies
- Philosophy
- Concern for public image
- Products or services
- Technology
- Self-concept
- Concern for employees
Step 2: External Analysis
- Conduct an external analysis to:
- Know what the competition is doing
- Understand how pending legislation might affect the organization
- Determine the stability of the local labor supply
- Examine all components of the environment, including:
- Economic
- Demographic
- Political/legal
- Sociocultural
- Technological
- Global
- Identify opportunities and threats
Step 3: Internal Analysis
- Conduct an internal analysis to gather critical information about an organization's resources and capabilities.
- Organization's resources:
- Financial
- Physical
- Human
- Intangible
- Organization's capabilities:
- Skills and abilities in doing work activities
- Core competencies (major value-creating capabilities)
- Identify organizational strengths and weaknesses.
SWOT Analysis
- Combines external and internal analyses to identify:
- Strengths
- Weaknesses
- Opportunities
- Threats
Step 4: Formulate Strategies
- Formulate strategies that:
- Exploit an organization's strengths and external opportunities
- Buffer or protect the organization from external threats
Learn about the strategic management process which involves six steps: strategy planning, implementation, and evaluation. Discover how each step contributes to the success of an organization's strategies. Understand the importance of proper implementation and evaluation in achieving strategic goals.
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