KEY TERMS IN STRATEGIC MANAGEMENT

• Strategists

Strategists are individuals who are most responsible for the success or failure of an organization. Strategists are individuals who form strategies. Strategists have various job titles, such as chief executive officer, president,and owner, chair of the board, executive director, chancellor, dean, or entrepreneur. Strategists help an organization gather, analyze, and organize information. They track industry and competitive trends, develop forecasting models and scenario analyses, evaluate corporate and divisional performance, spot emerging market opportunities, identify business threats, and develop creative action plans. Strategic planners usually serve in a support or staff role. Usually found in higher levels of management, they typically have considerable authority for decision making in the firm. The CEO is the most visible and critical strategic manager. Any manager who has responsibility for a unit or division, responsibility for profit and loss outcomes, or direct authority over a major piece of the business is a strategic manager (strategist).
Strategists differ as much as organizations themselves and these differences must be considered in the
formulation, implementation, and evaluation of strategies. Some strategists will not consider some types of
strategies because of their personal philosophies. Strategists differ in their attitudes, values, ethics,
willingness to take risks, concern for social responsibility, concern for profitability, concern for short-run
versus long-run aims and management style.

• Vision Statements

Many organizations today develop a "vision statement" which answers the question, what do we want to
become? Developing a vision statement is often considered the first step in strategic planning, preceding

even development of a mission statement. Many vision statements are a single sentence. For example the
vision statement of Stokes Eye Clinic in Florence, South Carolina, is "Our vision is to take care of your
vision." The vision of the Institute of Management Accountants is "Global leadership in education,
certification, and practice of management accounting and financial management."

•  Mission Statements

Mission statements are "enduring statements of purpose that distinguish one business from other similar firms.
A mission statement identifies the scope of a firm's operations in product and market terms. It addresses
the basic question that faces all strategists: What is our business? A clear mission statement describes the
values and priorities of an organization. Developing a mission statement compels strategists to think about
the nature and scope of present operations and to assess the potential attractiveness of future markets and
activities. A mission statement broadly charts the future direction of an organization. An example mission
statement is provided below for Microsoft.
Microsoft's mission is to create software for the personal computer that empowers and enriches people in
the workplace, at school and at home. Microsoft's early vision of a computer on every desk and in every
home is coupled today with a strong commitment to Internet-related technologies that expand the power
and reach of the PC and its users. As the world's leading software provider, Microsoft strives to produce
innovative products that meet our customers' evolving needs.

•  External Opportunities and Threats

External opportunities and external threats refer to economic, social, cultural, demographic, environmental,
political, legal, governmental, technological, and competitive trends and events that could significantly
benefit or harm an organization in the future. Opportunities and threats are largely beyond the control of a
single organization, thus the term external. The computer revolution, biotechnology, population shifts,
changing work values and attitudes, space exploration, recyclable packages, and increased competition from
foreign companies are examples of opportunities or threats for companies. These types of changes are
creating a different type of consumer and consequently a need for different types of products, services, and
strategies.Other opportunities and threats may include the passage of a law, the introduction of a new product by a competitor, a national catastrophe, or the declining value of the dollar. A competitor's strength could be a threat. Unrest in the Balkans, rising interest rates, or the war against drugs could represent an opportunity or a threat. A basic tenet of strategic management is that firms need to formulate strategies to take advantage of external opportunities and to avoid or reduce the impact of external threats. For this reason, identifying, monitoring, and evaluating external opportunities and threats are essential for success.

•  Environmental Scanning:

The process of conducting research and gathering and assimilating external information is
sometimes called environmental scanning or industry analysis. Lobbying is one activity that some
organizations utilize to influence external opportunities and threats.
Environment scanning has the management scan eternal environment for opportunities and threats and
internal environment for strengths and weaknesses. The factor which are most important for corporation
factor are referred as a strategic factor and summarized as SWOT standing for strength, weaknesses,
opportunities and threats.

Stages of Strategic management:

The strategic management process consists of three stages:

• Strategy Formulation (strategy planning)
• Strategy Implementations
• Strategy Evaluation

Strategic Formulation:
Strategic formulation means a strategy formulate to execute the business activities. Strategy formulation includes developing:-.

•  Strength and weakness (Strong points of business and also weaknesses)
•  Opportunities and threats (These are related with external environment for the business)

Strategy formulation is also concerned with setting long term goals and objectives, generating alternative
strategies to achieve that long term goals and choosing particular strategy to pursue.
The considerations for the best strategy formulation should be as follows:

•  Allocation of resources
•  Business to enter or retain
•  Business to divest or liquidate
•  Joint ventures or mergers
•  Whether to expand or not
•  Moving into foreign markets
•  Trying to avoid take over 

Strategy Implementation
Strategy implementation requires a firm to establish annual objectives, devise policies, motivating employees
and allocate resources so that formulated strategies can be executed. Strategy implementation includes
developing strategy supportive culture, creating an effective organizational structure, redirecting marketing
efforts, preparing budgets, developing and utilizing information system and linking employee compensation
to organizational performance.
Strategy implementation is often called the action stage of strategic management. Implementing means
mobilizing employees and managers in order to put formulated strategies into action. It is often considered
to be most difficult stage of strategic management. It requires personal discipline, commitment and
sacrifice. Strategy formulated but not implemented serve no useful purpose.
Strategy evaluation:
Strategy evaluation is the final stage in the strategic management process. Management desperately needs to
know when particular strategies are not working well; strategy evaluation is the primary means for obtaining
this information. All strategies are subject to future modification because external and internal forces are
constantly changing.

STRATEGIC MANAGEMENT

Objectives:
This Lecture provides an overview of strategic management. It introduces a practical, integrative model of the strategic-management process and defines basic activities and terms in strategic management and discusses the importance of business ethics. After reading this lecture you will be able to know that:
What Is Strategic Management?
Discuss the nature of strategy formulation, implementation, and evaluation activities.
What is strategic management?
Strategic Management can be defined as “the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objective.”
Definition:
“The on-going process of formulating, implementing and controlling broad plans guide the organizational in achieving the strategic goods given its internal and external environment”. Interpretation:
1. On-going process:
Strategic management is a on-going process which is in existence through out the life of organization.
2. Shaping broad plans:First, it is an on-going process in which broad plans are firstly formulated than implementing and finally
controlled.
3. Strategic goals:
Strategic goals are those which are set by top management. The broad plans are made in achieving the goals.
4. Internal and external environment:
Internal and external environment generally set the goals. Simply external environment forced internal
environment to set the goals and guide them that how to achieve the goals?

Importance of strategic Management
Why do we need to lay so much stress on strategic management? Strategic management becomes important due to the following reasons:

Globalization: The survival for business

E-Commerce: A business tool

Earth environment has become a major strategic issue