Ghani Glass (Strategic Management Report)

Topics: Strategic management, Porter five forces analysis, Marketing Pages: 33 (5493 words) Published: May 10, 2010
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“Strategic Management can be defined as the Art and Science of formulating, implementing and evaluation cross-functional decisions that enable an organization to achieve its objectives” [1]

“Strategy is the direction and scope of an organization over the long-term which achieves advantage for the organization t

Through its configuration of resources within a challenging environment to meet the needs of markets and to fulfill stakeholder expectations".[2]

Stages of Strategic Management

The strategic-management process consists of 3 stages that are;


Strategic Analysis

This is all about the analyzing the strength of businesses' position and understanding the important external factors that may influence that position. The process of Strategic Analysis can be assisted by a number of tools, including:

• PEST ANALYSIS - a technique for understanding the "environment" in which a business operates

• SCENARIO PLANNING - a technique that builds various plausible views of possible futures for a business

• FIVE FORCES ANALYSIS - a technique for identifying the forces which affect the level of competition in an industry

• MARKET SEGMENTATION - a technique which seeks to identify similarities and differences between groups of customers or users

• DIRECTIONAL POLICY MATRIX - a technique which summarizes the competitive strength of a business’s operations in specific markets

• COMPETITOR ANALYSIS - a wide range of techniques and analysis that seeks to summaries a businesses' overall competitive position

• CRITICAL SUCCESS FACTOR ANALYSIS - a technique to identify those areas in which a business must outperform the competition in order to succeed

• SWOT ANALYSIS - a useful summary technique for summarizing the key issues arising from an assessment of a business’s "internal" position and "external" environmental influences.


This process involves understanding the nature of stakeholder expectations (the "ground rules"), identifying strategic options, and then evaluating and selecting strategic options.


It is the trickiest part... When a strategy has been analyzed and selected, the task is then to translate it into organizational action.


Vision statements are defined by organizations as “What do we want to become?” [3]

“Strategic visions ought to convey a larger sense of purpose- so that employees see themselves as “building cathedral” rather than “laying stones”. [4]


“Mission Statements are enduring statements of purpose that distinguish one business from other similar firms. A mission statement identifies the scope of the firm’s operations in product and market terms.” [5]

“A mission describes the organization’s basic function in society in terms of the products and services it produces for its customers”. [6]

A clear Mission statement should have each of the following elements:


External Assessment: Porter 5 Forces Model That Shapes Industry

The process of performing an external audit must involve as many managers and employees as possible. Awareness of the 5 forces for external assessment can be very useful for the firm as it is able to determine the position of the respective company in the industry. To perform an external audit a company must accumulate competitive intelligence and information about economic social cultural demographic environmental political governmental legal and technological trends. Other sources include magazines, newspaper, internet and business journals.

Following are the 5 forces that shape strategy. [7]

These 5 forces determine the attractiveness of the industry. If the rivalry is intense, for example in auto and gaming industry, we can say that it has reduced the attractiveness of the industry. Similarly, if the forces are moderate, as they are in industries such as...
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