Chapter 3 – Strategic Management Process Flashcards
What is the strategic management process?
The set of activities the firm managers undertake in order to try to put their firms in the best possible position to compete successfully in the marketplace
What are the activities that make up the strategic management process?
- Firm Vision & Mission
- Strategic Analysis
- Develop Strategic Objectives
- Implement Strategies
- Measure & Evaluate Performance
What is a vision statement?
- An expression of what a business founders want that business to accomplish. Usually very broad
- Why do we exist?
What is a mission statement?
- How the firm will try to make its vision a reality. More specific.
- Not exactly a strategy but focuses on describing the products a firm plan to offer or the target markets it plans to serve.
- How do we do that?
What is a strategic analysis?
An analysis of a firms external and internal environment that serves to give managers a clear picture of what they have to work with and what needs to be addressed when developing a plan for the firm’s success
What are the 3 levels of strategies?
- Corporate level strategies
- Business level strategies
- Market level strategies
What are corporate level strategies?
- Broadest strategies that apply to the entire company
- Sets the target for the rest of the strategies
- Vision & Mission Statements
What are business level strategies?
- Identifying competitive advantage
- Managers look at how the company can best meet the target set by the corporate level
What are market level strategies?
- Growth strategies
- Decisions about how the company will work inside the market
What are strategic objectives?
- The big picture goals for the company describing what the company will do to try to fulfill its mission. Usually some sort of performance goal.
- What will we do?
What are the 3 types of grand strategies?
- Growth Strategy
- Stability Strategy
- Defensive Strategy
What is a growth strategy?
Involves developing plans to increase the size of the firm in terms of revenue, market share or geographic reach
What is a stability strategy?
A strategy for a company to maintain its current income, market share or geographic reach
What is a defensive strategy?
A company that is struggling may decide to shrink its operations to reduce costs in order to survive
What does SMART in SMART GOALS stand for?
- Specific
- Measurable
- Achievable
- Relevant
- Time-Bound
What is involved in the process of implementing strategies?
A combination of deciding what needs to be done, figuring out how to do it, assigning roles to people and providing them the resources to complete their tasks, and overseeing the work to make sure it gets done correctly and in a timely manner
What is a short-term strategic plan?
Can be done in less than a year
What is a long-term strategic plan?
Can’t be down in less than a year
What are the steps in the planning cycle?
- Set goals
- Design plan
- Implement plan
- Review results
What are the levels of strategic planning?
- Strategic
- Tactical
- Operational
What is strategic planning?
- Why?
- High-level planning performed by company executives in order to set the overall direction of the company
- Connects the company’s actions back to its vison & mission statements
What is tactical planning?
- What?
- Mid-level planning performed by division managers that consists of broad ideas of what the company should do to pursue its mission
What is operational planning?
- How?
- Lays the front-line activities each employee will do to advance the tactical plans
- Daily activities required for the company to function
What is the process involved when implementing a plan?
The execution of a strategy by assigning tasks for people to carry out to accomplish the companies’ strategic goals
