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THE STRATEGIC
MANAGEMENT
PROCESS
Screen graphics created by:
Jana F. Kuzmicki, PhD, Indiana University Southeast
Concept
l Competitive moves and business
approaches management employs in
running a company
l Management’s “game plan” to
4 Please customers
4 Position a company in its chosen market
4 Compete successfully
4 Achieve good business performance
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l A strategic vision is a
roadmap of a company’s
future --
4 Direction it is headed
4 Business position it
intends to stake out
4 Capabilities it plans to
develop
4 Customer needs it
intends to serve 12
McDonald’s Corporation
McDonald’s vision is to dominate the global
foodservice industry. Global dominance means
setting the performance standard for customer
satisfaction while increasing market share and
profitability through our Convenience,
Value, and Execution Strategies.
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Microsoft Corporation
One vision drives everything we do: A computer
on every desk and in every home using great
software as an empowering tool.
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Eastman Kodak
We are in the picture business.
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Compaq Computer
To be the leading supplier of PCs and PC
servers in all customer segments.
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Bristol-Myers Squibb
The mission is to extend and enhance human
life by providing the highest quality health and
personal care products. We intend to be the
preeminent global diversified health
and personal care company.
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l Establishing OBJECTIVES
4 Converts vision into specific
performance targets
4 Creates yardsticks to track performance
4 Pushes firm to be inventive and focused
4 Helps prevent coasting and complacency
if targets require stretch
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Outcomes focused on
Outcomes focused on
improving a firm’s
improving a firm’s
competitiveness and
financial performance
its long-term business
position
$
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25
Domino’s Pizza
To safely deliver a hot, quality
pizza in 30 minutes or less at a fair
price and a reasonable profit.
26
Alcan Aluminum
To be the lowest-cost producer
of aluminum and to outperform the
average return on equity of the
Standard and Poor’s
industrial stock index.
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Atlas Corporation
To become a low-cost, medium-size
gold producer, producing in excess of
125,000 ounces of gold a year and building
gold reserves of 1,500,000 ounces.
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3M Corp.
Planned (or
Intended)
Strategy
Actual
Strategy
Adaptive
Reactions
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l Strategic priorities
4 Continued growth
4 Providing exceptional customer care
4 Remaining an efficient and quality
producer
4 Offering high value and
good-tasting products
4 Effectively marketing McDonald’s brand
on a global scale
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Action approaches to
achieve targeted results --
A comprehensive strategy
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Strategy implementation is an
internal, operations-driven activity
involving organizing, budgeting,
motivating, culture-building,
supervising, and leading to
“make the strategy work”
as intended!
44
l Corrective adjustments
4 Alter long-term direction
4 Redefine the business
4 Raise or lower performance
objectives
4 Modify the strategy
4 Improve strategy execution
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Strategic Vision
A view of an organization’s future direction and
business course; a guiding concept for what the
organization is trying to do and to become.
Organization Mission
Represents management’s customized answer to the
question “what is our business and what will it be.” A
mission statement broadly outlines the organization’s
future direction and serves as a guiding concept for
what the organization is to do and to become.
57
Performance Objectives
Organization’s targets for achievement; both short
and long range objectives are needed.
Financial Objectives
Financial performance targets a company wants to
achieve.
Strategic Objectives
Targets relating to strengthening a company’s
overall market position and competitive viability. 58
Long-Range Objectives
Short-Range Objectives
Near-term performance targets; they establish the
pace for achieving the long-range objectives.
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Strategy
Managerial action plan for achieving organizational
objectives; strategy is mirrored in the pattern of
moves and approaches devised by management to
produce the desired performance. Strategy is the
how of pursuing an organization’s mission and
reaching target objectives.
Strategic Plan
Statement outlining an organization’s mission and
future direction, near-term and long-term performance
targets, and strategy, in light of organization’s external
and internal situation. 60
Strategy Implementation
Includes the full range of managerial
activities associated with putting the chosen
strategy into place, supervising its pursuit,
and achieving the targeted results.
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