Explain why strategic analysis is necessary in the process of developing an appropriate strategy. Identify tools that are available to examine the external environment and discuss how and why they are used.
Strategy is a high level plan in which to achieve one or more goals under conditions of uncertainty. It is very important because resources available to achieve these goals are usually limited. Strategy is often the difference between mediocrity and excellence.
Strategies exist at several levels in any organisation as stated above - ranging from the overall business through to individuals working in it. Corporate Strategy- is concerned with the overall purpose of the business to meet stakeholder expectations and needs. This is a crucial level since it is heavily influenced by investors in the business and acts to guide decision-making throughout the business. Business Unit Strategy- is concerned more with how a business competes successfully in a particular market. It concerns decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc. Operational Strategy- is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. Operational strategy therefore focuses on issues of resources, processes, people etc.
Strategic Management focuses solely on grand-scale corporate strategy. While strategic management at the corporate level typically involves a major strategic planning event each year for organizational leaders, their focus is different. They would focus on "individual" strategic management, contending that everyone member of an organization should have a strategic vision for his or her work, and understand how that individual contribution strengthens the organization as a whole. A person's strategic vision has two components. The first component should...
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