Strategic Management: The Nature And Value by Pearce and Robinson
Strategic Management
Chapter 1
The Nature and Value of Strategic Management
Strategic management:
The set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company’s objectives
According to Fred David, strategic management is synonymous with the term strategic planning
1. Formulation
2. Implementation
3. Evaluation
Strategic Plan
Company’s game plan
Results from tough managerial choices among numerous good alternatives and it signals commitment to specific markets, policies, procedures and operations
Nine Critical Tasks of Strategic Management
1. Formulate the company’s mission
2. Conduct an internal analysis
3. Assess the external environment – competitive and general contexts
4. Analyze the company’s options by matching its resources with the external environment
5. Identify the most desirable options in light of the mission
6. Select a set of long-term objectives and grand strategies that will achieve the most desirable options
7. Develop annual objectives and short-term strategies that are compatible with long-term objectives and grand strategies
8. Implement the strategic choices
9. Evaluate the success of the strategic process for future decision making
Strategy
Large-scale, future-oriented plan
Used to interact within competitive environment to achieve company goals
Provides a framework for managerial decisions
Reflects a company’s awareness of the main elements of competition
Dimensions of Strategic Decisions
Strategic issues require top-management decisions
Strategic decisions overarch several areas of a firm’s operations
Usually only top management has the perspective needed to understand their broad implications
Usually only top managers have the power to authorize necessary resource allocations
Strategic issues require large amounts of the firm’s resources
They involve substantial allocations of people, physical assets, and money
Strategic decisions commit the firm to actions over an
Chapter 1
The Nature and Value of Strategic Management
Strategic management:
The set of decisions and actions that result in the formulation and implementation of plans designed to achieve a company’s objectives
According to Fred David, strategic management is synonymous with the term strategic planning
1. Formulation
2. Implementation
3. Evaluation
Strategic Plan
Company’s game plan
Results from tough managerial choices among numerous good alternatives and it signals commitment to specific markets, policies, procedures and operations
Nine Critical Tasks of Strategic Management
1. Formulate the company’s mission
2. Conduct an internal analysis
3. Assess the external environment – competitive and general contexts
4. Analyze the company’s options by matching its resources with the external environment
5. Identify the most desirable options in light of the mission
6. Select a set of long-term objectives and grand strategies that will achieve the most desirable options
7. Develop annual objectives and short-term strategies that are compatible with long-term objectives and grand strategies
8. Implement the strategic choices
9. Evaluate the success of the strategic process for future decision making
Strategy
Large-scale, future-oriented plan
Used to interact within competitive environment to achieve company goals
Provides a framework for managerial decisions
Reflects a company’s awareness of the main elements of competition
Dimensions of Strategic Decisions
Strategic issues require top-management decisions
Strategic decisions overarch several areas of a firm’s operations
Usually only top management has the perspective needed to understand their broad implications
Usually only top managers have the power to authorize necessary resource allocations
Strategic issues require large amounts of the firm’s resources
They involve substantial allocations of people, physical assets, and money
Strategic decisions commit the firm to actions over an