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HE STRATEGIC MANAGEMENT PROCESS


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RAFTING AND IMPLEMENTING STRATEGY

Strategy development and execution is grounded in the broad range of business decisions and competitive moves management pursues in order to optimize successful performance consistent with its strategic plans goals, objectives and business initiatives. A strategic plan is the output that comes through the strategic management process and discipline that involves a team approach encompassing all functional areas within a business. Strategic planning is the foundation activity within the strategic management process that helps produce the organizations strategic plan. The strategic plan reflects a companys choice of actions among numerous alternative courses of action. The strategic plan supports and directs managements attention toward implementing a unified and measured approach to the completion of its intended business, market and strategic results. Crafting and implementing strategy should be core to every business and include all functional areas within the business. How well a strategic plan is executed has a direct influence on how successful a company will be in achieving its maximum potential. Execution of a powerful strategic plan through the strategic management process is both a proven recipe for business success and a reflection of excellent management. There are five interrelated tasks associated with the strategic management process. The strategic plan is the document that incorporates all the elements developed through the strategic management process. 1. Defining what business the company is in today and where it is going. This is done through the formulation of a strategic vision; where the organization is headed, coupled with what the organizations purpose or mission is today. 2. Merging the companys strategic vision and mission into measurable objectives and performance targets. 3. Crafting strategies to achieve performance goals and objectives. 4. Effectively implementing and executing all elements of the strategic plan. 5. Evaluating ongoing strategic plan performance in conjunction with new business, market and strategic developments. Initiate appropriate adjustments and corrective actions for both short and long-term goals, objectives and strategies as a function of actual experience, dynamic environmental conditions, current thinking, new ideas, perceived risks, and potential opportunities. The following models reflect the key elements associated with strategic planning and the strategic management process.

HE FIVE TASKS OF STRATEGIC MANAGEMENT

Task 1

Developing a Strategic Vision and Business Mission

Revise as Needed

Task 2

Setting Objectives

Revise as Needed

Task 3

Crafting a Strategy to Achieve the Objectives

Improve/Change as Needed

Task 4

Implementing and Executing the Strategy Evaluating Performance, Reviewing New Developments and Initiating Corrective Adjustments

Improve/Change as Needed

Task 5

R e cy cle to T a sk s 1 , 2, 3 , o r 4 as N ee d ed

HE ENTERPRISE STRATEGY PYRAMID

A Diversified Company
Responsibility of corporatelevel managers Responsibility of business-level general managers Responsibility of heads of major functional areas within a business unit or division Responsibility of plant managers, geographic unit managers, and lower-level supervisors Corporate Strategy Two-Way Influence Business Strategies Two-Way Influence Functional Strategies (R&D, manufacturing, marketing, finance, human resources, etc.) Two-Way Influence Operating Strategies (regions and districts, plants, departments with functional areas)

A Single-Business Company
Responsibility of executivelevel managers Responsibility of heads of major functional areas within a business Responsibility of plant managers, geographic unit managers, and lower-level supervisors Business Strategies Two-Way Influence Functional Strategies (R&D, manufacturing, marketing, finance, human resources, etc.) Two-Way Influence Operating Strategies (regions and districts, plants, departments with functional areas)

HE STRATEGIC PLANNING PYRAMID

FUTURE BUSINESS

E X T E R N A L

VISION
PURPOSE VALUES CONSTITUENT GROUPS GOALS ENVIRONMENTAL SCAN
ASSUMPTIONS

STRENGTHS, WEAKNESSES, THREATS, & OPPORTUNITIES

SITUATION ANALYSIS

I N T E R N A L

SHORT and LONG TERM OBJECTIVES and STRATEGIES CRITICAL ISSUES - KEY DECISIONS

CURRENT BUSINESS

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