The managerial process of crafting and executing a company's strategy consists of five interrelated and integrated phases:
1. Developing a strategic vision of where the company needs to head and what its future product/market/customer/technology focus should be. This managerial step provides long-term direction, infuses the organization with a sense of purposeful action, and communicates management's aspirations to stakeholders.
2. Setting objectives to spell out for the company how much of what kind of performance is expected, and by when. The objectives need to require a significant amount of organizational stretch. A balanced scorecard approach for measuring company performance entails setting both financial objectives and strategic objectives.
3. Crafting a strategy to achieve the objectives and move the company along the strategic course that management has charted. Crafting strategy is concerned principally with forming responses to changes under way in the external environment, devising competitive moves and market approaches aimed at producing sustainable competitive advantage, building competitively valuable competencies and capabilities, and uniting the strategic actions initiated in various parts of the company. The more that a company's operations cut across different products, industries, and geographical areas, the more that strategy making becomes a team effort involving managers and company personnel at many organizational levels. The total strategy that emerges in such companies is really a collection of strategic actions and business approaches initiated partly by senior company executives, partly by the heads of major business divisions, partly by functional-area managers, and partly by frontline operating managers. The larger and more diverse the operations of an enterprise, the more points of strategic initiative it has and the more managers and employees at more levels of management that have a relevant strategy-making role. A...
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