Why Strategy?

It’s about how businesses compete.

How to earn above average returns.
Selection of industries
Selection of segments
Choice of tactics
How to IMPLEMENT!

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 Strategic
Management: The set of managerial
decisions and actions that determines the
long-run performance of an organisation.

 Strategic Planning: The process of

determining a company's long-term goals
and then identifying the best approach for
achieving those goals

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 Step 1: Identifying the organisation’s current
mission, objectives, and strategies
 Mission: the firm’s reason for being
 Who we are,
 What we do, and
 Where we are now

 Goals: the foundation for further planning

 Measurable performance targets

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 Step 2: Conducting an external analysis
 The environmental scanning of specific and general
environments
 Focuses on identifying opportunities and threats

 Step 3: Conducting an internal analysis

 Assessing organisational resources, capabilities,
activities and culture:
 Strengths (core competencies) create value for the customer
and strengthen the competitive position of the firm.
 Weaknesses (things done poorly or not at all) can place the
firm at a competitive disadvantage.

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Internally focused, it is the leveraging
of a firms resources, capabilities, and
core competencies to establish the Together,
firms goals in the competitive strategic intent
environment.
and strategic
mission yield the
insights required
to formulate and
Strategic Mission implement
Externally focused, it is a statement of a strategies.
firms unique purpose and the scope of
it’s operations in product and market
terms.
© 2006 by Nelson, a division of
Thomson Canada Limited. 1-7
Strategic Management Process
(cont’d)
Step 4: Formulating strategies
◦ Develop and evaluate strategic alternatives
◦ Select appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
◦ Match organizational strengths to
environmental opportunities
◦ Correct weaknesses and guard against threats

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Step 5: Implementing strategies
 Implementation: effectively fitting organizational
structure and activities to the environment
 Effective strategy implementation requires an
organizational structure matched to its requirements.
 It includes programs, budgets & procedures.

Step 6: Evaluating results

 How effective have strategies been?
 What adjustments, if any, are necessary?

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