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Hierarchy of goals- traditional view of goals from the top of the firm down to
front-line employees as a chain.
Procedures- spell out what to do if a specific situation arises.
Strategic plan- the companys overall plan for how it will match its internal
strengths and weaknesses with external opportunities and threats in order to
maintain a competitive advantage.
o Similar to business models but not the same. A Business Model is the
companys method for making money in the current business
environment.
Strategy- the course of action the company can pursue to achieve its strategic
aims.
Strategic management- the process of identifying and executing the
organizations strategic plan, by matching the companys capabilities with the
demands of its environment.
o Steps of Strategic Management1) Ask, where are we now?
Define the companys current business and mission. Focus
on 4 aspects of the current business: (1) product scopecurrent range of products and services. (2) Vertical
integration- factor that distinguishes one business from
another. (3) Geographic Range (4) Competitive Advantage
Mission Statement- sums up the essence of what the
company must do to compete in the marketplace, and
provides the framework that guides managers and
employees day-to-day.
2) Size up the Situation: Perform External and Internal Audits
Are we heading in the right direction given the challenges
that we face?
Use SWOT analysis or Environmental Scanning
3) Create Strategic Options
4) Review Strategic Options
5) Make A Strategic Choice
6) Translate into Goals
7) Implement the Strategies
8) Evaluate Performance
3 types of Strategic Planning1) Corporate-Level Strategy: type of strategy that identifies the portfolio of
businesses that, in total, comprise the company and the ways in which
these businesses relate to each other.
Diversification corporate strategy means that the firm will expand
by adding new product lines.