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* 1. Chapter 8 STRATEGIC MANAGEMENT © 2003 Pearson Education Canada Inc. 8.1 * 2. LEARNING OBJECTIVES You should be able to: Explain the importance of strategic management Describe the steps in the strategic management process Explain SWOT analysis Differentiate corporate-, business-, and functional-level strategies 8.2 * 3. LEARNING OBJECTIVES (continued) You should be able to (continued): Explain what competitive advantage is and why it’s important to organizations Describe the five competitive forces Identify the various competitive strategies 8.3 * 4. THE IMPORTANCE OF STRATEGIC MANAGEMENT What Is Strategic Management? A set of managerial decisions and actions that determines the long-run performance of an organization Purposes of Strategic Management Involved in many decisions that managers make Companies with formal strategic management systems have higher financial returns than companies with no such system Important in profit and not-for-profit organizations 8.4 * 5. THE STRATEGIC MANAGEMENT PROCESS (Exhibit 8.1) 8.5 * 6. THE STRATEGIC MANAGEMENT PROCESS Step 1: Identifying the Organization’s Current Mission, Objectives, and Strategies Mission statement of the purpose of an organization important in profit and not-for-profit organizations important to identify the goals currently in place and the strategies currently being pursued 8.6 * 7. COMPONENTS OF A MISSION STATEMENT (Exhibit 8.2) 8.7 * 8. THE STRATEGIC MANAGEMENT PROCESS (continued) Step 2: Analyzing the Environment successful strategies are aligned with the environment examine both the specific and general environments to determine what trends and changes are occurring 3. Identifying Opportunities and Threats opportunities - positive trends in the external environmental threats - negative trends in the external environment 8.8 * 9. THE STRATEGIC MANAGEMENT PROCESS (continued) Step 4: Analyzing the Organization’s Resources and Capabilities examine the inside of the