major intended and emergent initiatives taken by general managers on behalf of owners,
involving utilisation of resources, to enhance the performance of ﬁrms in their external environments.
It entails specifying the organisation's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. “Strategic management is an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determin e how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment.”
Compilation and dissemination of a mission statement - the raison d'etre of an organisation
Identification of the scope of activities and the markets which an organisation wishes to undertake
Undertaking an environmental scanning - performing a situation analysis, self-evaluation and competitor analysis: both internal and external; both micro-environmental and macro-environmental.
Strategy evaluation and choice
An environmental scan will highlight all pertinent aspects that a ffect an organisation, whether external or sector/industry-based.
These options, once identified, have to be vetted and screened by an organisation. In addition to ascertaining the suitability, feasibility and acceptability of an option, the actual modes of pr ogress have to be determined. These pertain to:
The basis of competition
The basis of competition relates to how an organisation will produce its product offerings, together with the basis as to how it will act within a market structure, and relative to its competitors. Some of these options encompass:
A differentiation approach, in which a multitude of market segments are served on a mass scale. An example will include the array of products produced by Unilever, or Proctor and Gamble, as both forge many of the world's noted consumer brands serving a variety of market segments.
A cost-based approach, which often concerns economy pricing. An example may be dollar stores in the United States.
A focus (or niche) approach. In this paradigm, an organisation would produce items for a niche market, as opposed to a mass market. An example is Aston Martin cars.
Mode of action
Measuring the effectiveness of the organisational strategy, it's extremely important to conduct a SWOT analysis to figure out the internal strengths and weaknesses, and external opportunities and threats of the entity in business.
In corporate strategy, Johnson, Scholes and Whit tington present a model in which strategic options are evaluated against three key success criteria:
- Suitability (would it work?)
- Feasibility (can it be made to work?)
- Acceptability (will they work it?)
Suitability deals with the overall rationale of the strategy.
Feasibility is concerned with whether the resources required to implement the strategy are available, can be developed or obtained. Resources include funding, people, time and information.
Acceptability is concerned with the expectations of the identified stakeholders (mainly shareholders, employees and customers) with the expected performance outcomes, which can be return, risk and stakeholder reactions.
The direction of action
Strategic options may span a number of options, including:
Growth-based (inspired by Igor Ansoff's matrix - market...